OIL giant Royal Dutch Shell announced a 90% rise in annual profits to £11.5bn.
However, the company’s trading performance for the fourth quarter was well below City forecasts.
Stripping out one-off items, fourth quarter earnings of £2.5bn contrasted with the market’s anticipated result of about £2.9bn.
Analysts said the company’s downstream division, which covers refining and the sale of products, produced a weaker-than-expected recovery from the poor performance the previous year.
Shell said refining margins remained weak.
The company has responded through a restructuring and by refocusing its efforts on emerging growth markets.
In contrast to BP, which stopped paying dividends in the wake of the Gulf of Mexico disaster, Shell said it declared dividends of £6.3bn in 2010.
The rise in Shell’s profits reflected asset disposals and its strong upstream performance due to higher oil prices and a 5% increase in production to just under 3.5m barrels of oil equivalent in the fourth quarter.
Chief executive Peter Voser said: “We are making good progress against our targets, and there is more to come from Shell.”
Shell sold non-core assets for £4.3bn in 2010, helping boost its bottom-line profits, while proceeds are expected to reach £3.1bn this year.
At the same time, it made acquisitions during last year worth £4.3bn as it targets new areas of development, and invested £1.85bn in exploration activities.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said higher oil prices were providing a “tailwind” for Shell, but added that output prospects were also stronger.
