Shell swings back to profit in first quarter

Royal Dutch Sheel said it posted net profit of $5.7 billion in the three months to March
Royal Dutch Sheel said it posted net profit of $5.7 billion in the three months to March Adrian DENNIS AFP/File
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London (AFP)

Royal Dutch Shell said Thursday it swung back into profit in the first quarter as oil prices recovered strongly from a year earlier.

The company said in a statement it posted net profit of $5.7 billion in the three months to March compared with a bottom-line loss of $24 million a year earlier when the coronavirus pandemic began to slam the price of crude.

The first-quarter performance this year also benefitted from a $1.4-billion gain following the sale of assets, the statement said.

"Shell has made a strong start to 2021, generating over $8 billion of cash in the quarter," said chief executive Ben van Beurden.

"Our... model is ideally positioned to benefit from recovering demand."

Shell had dived into net loss of $21.7 billion last year as factories shut and planes were grounded.

As a result, it decided to axe more than 10 percent of its global workforce, or up to 9,000 jobs.

Its losses and steep job cuts mirror the situation elsewhere in the energy sector.

After lockdowns began to spread towards the end of last year's first quarter, oil prices dropped off a cliff, even briefly turning negative.

Prices then rebounded sharply, however, with benchmark Brent North Sea oil contract currently trading around $67 per barrel.

Shell rival BP on Tuesday said it, too, rebounded into profit in the first quarter, running up net profit of $4.7 billion compared with a year-earlier loss of $4.4 billion.