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11/28/2018, 4:03 PM (Source: TeleTrader)
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Shell gets outlook upgrade after deleveraging

Royal Dutch Shell Plc was affirmed at AA- by Fitch Ratings on Wednesday and its perspective was improved to stable from negative. The Anglo-Dutch giant achieved a notable level of deleveraging in the first nine months of the year, the credit appraiser said and expressed the view the current grade would remain through 2021.

The utility's adjusted net leverage of funds from operations dropped to 1.9 times year over year from 2.2 times on debt repayments, the report notes and highlights strong operating cash flows, oil and gas prices and progress in the divestment plan of $30 billion, which is almost finished. "In our view, the company's approach to share buybacks has been cautious so far, and the execution of the $25 billion buyback program is subject to debt reduction progress and oil price levels, which gives Shell some flexibility. The company aims to reach financial gearing of 20%, down from 23% at end-September 2018," it adds.

The net balance sheet was cut to $59 billion from $78 billion in two years, the rating agency wrote.

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