By Emmanuel Obisue
Energy giant, Shell, on Thursday posted record results with a $11.5 billion second-quarter profit, surpasing the mark it set only three months ago, lifted by strong gas trading and a tripling of refining profit.
The company also announced a $6 billion share buyback programme for the current quarter but did not raise its dividend of 25 cents per share, adding that shareholder returns would remain “in excess of 30% of cash flow from operating activities”.
This is also made possible by a rapid recovery in demand after the end of pandemic lockdowns which saw a surge in energy prices, driven by Russia’s invasion of Ukraine. This have boosted profits for energy companies after a two-year slump.
Shell bought back $8.5 billion of shares in the first half of 2022 and the new programme is significantly higher than forecast.
“The strong oil price backdrop has helped Shell deliver a blockbuster set of results. The dividend may have remained the same, but the share buyback programme is positive news for shareholders,” said Stuart Lamont, investment manager at Brewin Dolphin.
The energy giant’s shares were up 1.6% at 1115 GMT, compared with a 1.3% gain for the broader European energy index (.SXEP).
French rival TotalEnergies (TTEF.PA) also reported stellar results on Thursday, with a record profit of $9.8 billion for the quarter, and accelerated its buyback programme.
Similarly, Norway’s Equinor (EQNR.OL) raised its special dividend and boosted share buybacks on Wednesday.
US rivals Exxon Mobil (XOM.N) and Chevron (CVX.N) report results on Friday.
Oil and gas prices remained elevated in the quarter, with benchmark Brent crude averaging about $114 a barrel. Benchmark European natural gas prices and global liquefied natural gas (LNG) average prices were at record highs in the quarter.
Shell’s second-quarter adjusted earnings rose to $11.47 billion, above the $11 billion forecast by analysts in a poll provided by the company.
That was up from $5.5 billion a year earlier and $9.1 billion in the first quarter of 2022.
The strong results reflected higher energy prices and refining margins, as well as strong gas and power trading, the company said, but were partly offset by lower LNG trading results.
