And the company has an aggressive strategy for future growth.
Oil leviathan Royal Dutch Shell (LSE: RDSB) announced another impressive set of results today. The company reported a 54% increase in net income to $28.6 billion (£18 billion).
For the final three months of 2011 the business made $6.5 billion, up from $5.7 billion a year earlier. This was actually slightly below estimates, as Shell was hit by weak refining margins and low natural gas prices.
"The global economy and energy markets are likely to see continued high volatility," said chief executive Peter Voser, hinting at the risk of trouble in Europe and Iran.
Buoyed by a higher oil price
The results were buoyed by a rise in oil price, with Brent crude averaging $111 a barrel, as opposed to $80 in 2010. However, the trend of declining production continued, with a 3% fall in 2011.
There was good news for income investors, with Shell maintaining its dividend at 42 cents a share, with plans to increase this to 43 cents for the first quarter of 2012 -- the first increase since 2009. Shell declared $11 billion (£7 billion) of dividends in 2011.
Shell's strategy for growth
And the oil major announced an aggressive strategy for growth. It will pump money into new projects and more exploration. Net capital investment will be about $30 billion in 2012, with the company continuing to strengthen its position in natural gas, as well as investing more in oil-rich shale.
The results of this growth strategy should come through over the next decade, with oil and gas production expected to rise to four million barrels per day in 2017-18, a 25% increase from the 2011 level of 3.2 million barrels a day.
These are ambitious growth targets in a world where new oil and gas reserves are getting ever more difficult to find. But if they can be met, and considering that global energy demand is only going to increase in the future, I expect Shell's profits to continue their upward path.
The firm's shares have done well recently, but at the current price of 2,273p the company is still on a forward price-to-earnings ratio of just 9 and a forecast dividend yield of 4.5%. In my view, Shell is still a buy.
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