Record Q4 profits at Shell

By THIS IS MONEY
Updated: 19:00 EST, 9 February 2000

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Royal Dutch/Shell Group said on Thursday it would not rule out making a huge acquisition on the scale of many of its rivals, but said a smaller purchase was more likely. 'The mega stuff that's not so easy for us. I think you could see the regulatory limits being reached,' Chairman Mark Moody-Stuart told a news conference. 'We always said we don't rule it out...but I think it's more likely we may do something at the smaller end.'

The news came as the oil giant announced record fourth quarter profits on Thursday after a more than twofold jump in oil prices and as the benefits of its restructuring programme continued to show through.

Adjusted current cost net income soared by 173% to $2.235 billion in fourth quarter 1999, which was at the top end of analysts' forecasts, while net income of $2,582 billion compared with a loss of 3.739 billion the year before. Current cost net income rose 38% to $7.09 billion after adjusting for special credits and charges.

'They seem very good numbers. Everything seems to be ticking along very nicely,' Peter Hitchens, oil analyst with brokers Williams de Broe, said.shares in Shell were 2.93% higher at 430 pence at 1115, while Royal Dutch shares in Amsterdam were up 1.50% at 54.11 euros.

'We've had another strong performance in the fourth quarter. We've achieved cost improvements well ahead of plan -- now standing at $2 billion for the year and well on the way towards the new $4 billion annual target by 2001,' Chairman Mark Moody-Stuart said in a statement.

The group raised the final dividend for Shell shareholders to 8.5 pence from 8.2 and for Royal Dutch shareholders to 0.86 euros from 0.83. On a full year basis, the total dividends were increased by 3.7 percent for Shell to 14 pence and by four percent for Royal Dutch to 1.51 euros.

Hitchens said the small dividend increases were a slight disappointment but added people would be focusing more on the ongoing restructuring programme and subsequent cost savings.