In the second quarter, Shell unexpectedly made an adjusted profit, benefiting from strong business performance and lower operational expenditure.
Shell put in the books an adjusted profit based on current estimated stock costs of 638 million dollars, whereas analysts here expected an average loss of 674 million dollars. The Morgan Stanley report also points to Shell’s cash flow. The advice is equal weight. Goldman Sachs (buy) also says that Shell performed well with its trading activities, making it possible to compensate for the weakness of other divisions.
ING also claims that the adjusted profit showed a positive surprise. The large depreciation at Shell shows how big the impact of the coronacrisis and the lower oil prices on the company is. ING has a hold advice and a price target of 16.50 euro for Shell.
On Thursday, the Shell stock took a little extra at 13.72 euros.
Meanwhile French Total oil group is suffering from losses. Total saw his profits plummet in the second quarter. Like many industry representatives, the French oil and gas company is experiencing a decline in demand due to the coronacrisis and falling oil prices due to oversupply. Nevertheless, Total maintains its dividend.
The company reported a 96 percent decrease in net profits on Thursday compared to the same period a year earlier, leaving 126 million dollars. A year ago, the net profit was over USD 2.8 billion. Total had a turnover of $ 25.7 billion in the second quarter compared to $ 51.2 billion a year earlier.
Total’s shareholders can count on an interim dividend of 0.66 euros per share, despite the very heavy quarter. Total said that production reductions and increased demand contribute to a recovery in the oil market since June.
“However, the oil climate remains volatile, given the uncertain size and speed of the global economic recovery after the coronapandemia,” said topman Patrick Pouyanne.
Due to difficult market conditions, Total is cutting its investments. They are now up to USD 14 billion this year, a quarter less than previously planned. The cost savings for this year are also increased to USD 1 billion. In addition, the oil company notes a depreciation of the assets of $ 8 billion, mainly made up of Canadian oil sands projects.