Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Shell has announced another $3.5bn of share buybacks after its quarterly profits exceeded market expectations.
Europe’s largest oil and gas company reported adjusted earnings of $6bn for the third quarter, beating average analyst estimates of $5.4bn and only slightly down from $6.2bn in the same period last year.
Shell, like most of its rivals, has used bumper profits from the past two years to embark on a huge share repurchasing scheme. It distributed $23bn to shareholders last year, representing more than 42 per cent of cash flow from operations.
Shell said on Thursday that this was the 12th consecutive quarter that the company had announced $3mn or more of share buybacks.
Since taking over in January 2023, chief executive Wael Sawan has sought to improve financial performance by cutting costs and simplifying Shell’s approach to the energy transition.
That process has involved streamlining the senior management team, re-emphasising the oil and gas business and trimming less profitable parts of the company’s low-carbon portfolio.
In line with those plans, Shell said capital expenditure for 2024 would be at “the lower end” of the previously outlined range of $22bn-$25bn. Net debt fell by $3.1bn from the previous quarter to $35.2bn.
“We continue to deliver more value with less emissions, whilst enhancing the resilience of our balance sheet,” Sawan said in a statement.
The biggest contributor to group profits was once again Shell’s integrated gas division, which reported quarterly earnings of $2.9bn driven by higher production of liquefied natural gas.
In the upstream division focused on exploration and production, weaker oil prices were offset by greater operational efficiency, delivering adjusted earnings of $2.4bn, up from $2.3bn in the previous quarter.
But earnings in the chemicals and products division, which includes refining, slumped to $463mn from $1.1bn in the previous quarter, driven by lower margins due to increased supply in the market, it said.
The company maintained its dividend at $0.34 a share.
This is a developing story