Shell profits almost halve on huge impairment charge

Royal Dutch Shell's net profits almost halved in the first quarter on a vast impairment charge on its refineries in Asia and Europe, the Anglo-Dutch oil giant said Wednesday.
Earnings after taxation dived 45 percent to $4.51 billion in the three months to March, compared with $8.18 billion a year earlier, Shell revealed in a results statement.
The group took a huge impairment charge of $2.9 billion, mostly on the declining value of its refining division, but its share price rose on news of a dividend hike.
Shell added that profit on a current cost of supplies (CCS) basis or current-cost accounting -- which strips out changes to the value of oil and gas inventories -- sank 44 percent to $4.5 billion from $8.0 billion.
Oil and gas production dipped 4.0 percent to 3.25 million barrels of oil equivalent per day in the first quarter, compared with last time around. Revenues slid 2.8 percent to $109.66 billion in the quarter.
The London-listed major added it will sell its downstream refining and marketing businesses in Denmark, and would also consider the sale of its marketing assets in Norway as part of its ongoing overhaul.
"As we saw in 2013, we are in an industry where high volatility remains, both in the macro-environment and in our quarterly results," said chief executive Ben van Beurden.
He added: "The impairments we have announced today in downstream reflect Shell's updated views on the outlook for refining margins.
"There are substantial pressures on the industry from excess capacity, changing product demand, and new oil supplies from liquids-rich shales."
Despite tumbling profits, Shell's share price rallied on Wednesday after the group ramped up its shareholder dividend.