Shell, a London-listed competitor of BP, has reported better-than-expected profits and extended its multi-billion dollar share buyback program.
The adjusted profits of Europe’s largest oil and gas company increased by 24 per cent during the second quarter to $6.3 billion, from $5.1 billion. This was ahead of expectations of $6 billion.
The shareholders were rewarded by a further $3.5billion in share buybacks until the end of September. This is the eighth quarter in a row that the company announced buybacks between $3 billion and $4 billion. The company also announced a dividend of 34.4 cents for the second quarter, up from 33.1 cents in the previous year.
Shell’s chief executive Wael Sawan said that the company “deliver[ed] another strong quarter in terms of financial and operational results”.
The integrated gas business’ profits, which include its secretive trading arm of gas, increased by 7 percent to $2.7 billion from $2.5 billion the year before. The sales of liquefied gas boosted the result which was above analyst expectations.
The adjusted profit for oil and gas production also exceeded expectations, rising to $2.3 billion from $1.7 billion.
Shell’s earnings were hit by almost $800m due to the suspension of work on , one of Europe’s largest biofuel plants. The chemicals division also suffered a $708b impairment related to the sale of Singapore refineries.
Sawan, the new chief executive who assumed his role at the beginning of last year, has scaled back several clean energy projects. Shell has since then stopped investing in battery storage and renewable energy.
Sawan, 49 years old, has promised to be “ruthless”, improving performance, and focusing capital in the most profitable areas of the business. This includes oil and gas.
The oil giant’s shares are valued at a lower level than its American competitors, despite a 21 percent rise in the last 12 months. This has raised questions about whether Sawan would lead it to move its London listing to New York to try to close this valuation gap.
This year, the capital expenditure target for this fiscal year is between $22 and $25 billion.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.