To no one's great surprise, Royal Dutch Shell (RDSB) reported a 47 per cent drop in underlying earnings at the half-year mark. But accompanying news that it intends to cut another 6,500 jobs buoyed the share price and underlines management's determination to optimise cash flows and provide adequate cover for future dividend payments - a key concern for City analysts and investors.
With oil prices in the doldrums - and no respite in sight - management is digging in for a "prolonged downturn". Earlier this year Shell's chief executive, Ben van Beurden, unveiled plans to cut a further $15bn (£9.6bn) from the group's capital budget over the next three years. This year's capital investment will be reduced by around 20 per cent. But the challenge facing management is brought into focus by a near one-third fall in operating cash flows in the second quarter.