(Alliance News) - Royal Dutch Shell PLC on Thursday said it may not be able to reduce debt as planned and keep on with its share buyback programme.
Shell is looking to reduce gearing to 25% by 2020. At the end of September, it stood at 27.9%, higher than the 27.6% at the end of June and 23.1% a year before.
The oil major, London's largest listed company, has kept the dividend for the third quarter at 47 US cents, the same as the prior quarter, and also announced a new USD2.75 billion buyback, as it looks to return USD25 billion to shareholders.
Chief Executive Ben van Beurden commented: "Our intention to buy back USD25 billion in shares and reduce net debt remains unchanged.
"The prevailing weak macroeconomic conditions and challenging outlook inevitably create uncertainty about the pace of reducing gearing to 25% and completing the share buyback programme within the 2020 timeframe."
Shell's CCS earnings, its preferred profit metric, excluding items was USD4.92 billion for the third quarter, 15% lower year-on-year.
CCS earnings attributable to shareholders rose 9% to USD6.08 billion, but excluding items fell 15% to USD4.77 billion.
Upstream CCS earnings excluding items halved to USD907 million, though Downstream rose 7% to USD2.15 billion and Integrated Gas was up 17% to USD2.67 billion.
Shell's free cash flow was USD10.12 billion, up 26% from a year prior, with operating cash flow up 1% to USD12.25 billion.
"This quarter we continued to deliver strong cash flow and earnings, despite sustained lower oil and gas prices, and chemicals margins," continued van Beurden.
"Our earnings reflect the resilience of our market-facing businesses and their ability to capitalise on market conditions, including very strong trading and optimisation results this quarter."
By George Collard; georgecollard@alliancenews.com
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