LONDON (Alliance News) - Moody's Investors Service on Friday affirmed the Aa2 issuer ratings of oil & gas company Royal Dutch Shell PLC, and kept a stable outlook.
The ratings agency noted Shell's financial profile strengthened "substantially" over the last two years, supported by rising operating cash flow generation, reduced capital spending, and a successfully executed USD30 billion divestment programme.
In 2017, operating cash flow surged by 73% to USD35.65 billion with capital investments down by 85% to USD3.83 billion.
In 2018, Shell further improved its operating cash flow to USD53.09 billion, with capital investment up 17% to USD4.46 billion.
Moody's said the ratings affirmation reflects its expectation continued strong operating performance in 2019 and 2020 will be offset by rising shareholder remuneration, thereby preventing Shell's financial profile to sustainably achieve the level commensurate with a higher rating.
"We have affirmed Shell's Aa2 rating with stable outlook reflecting the improved financial profile on the back of strong operating performance in 2018 and substantial de-leveraging," said Moody's Senior Vice President Sven Reinke.
"However, while Shell is now strongly positioned in the Aa2 rating category, we expect the company's rising shareholder remuneration will prevent it from achieving a further improvement of its financial profile," added Reinke.
Shell's A shares were trading 0.3% higher on Friday at 2,355.5 pence each, while B shares were up 0.2% at 2,370.0p.
