Shell delivers record profit as commodity prices rise
Shell (NYSE:SHEL) on Thursday reported another record quarterly profit — its second consecutive record quarter — as oil and gas prices jumped and refining margins soared.
Shell posted adjusted profit – the metric most watched by analysts – of $11.472 billion for the second quarter, up from the previous record profit of $9.130 billion recorded for the first quarter of this year, and more than double the $5.534 billion in profit for the second quarter of last year. Second-quarter 2022 earnings were also above analysts’ expectations of $11 billion.
The profit boost primarily reflects higher realized prices, higher refining margins and higher gas and power trading and optimization results, Shell said.
Cash flow from operating activities jumped 26% sequentially to $18.655 billion.
Following the record results, Shell announced a $6 billion share buyback program, which is expected to be completed by the third quarter 2022 earnings announcement. These share buybacks will be in addition to the buyback program of $8.5 billion for the first half of 2022, which ended in early July.
“With the current outlook for the energy sector and subject to board approval, distributions to shareholders are expected to remain above 30% of cash flow from operating activities,” Shell said.
Analysts expected Europe’s biggest companies – Shell, BP and TotalEnergies – to increase share buybacks, and some also predicted that Shell could announce another dividend increase based on a new set of results. successful for the second quarter.
But Shell did not. The supermajor left its dividend unchanged at $0.25 per share for the second quarter.
“With volatile energy markets and the continued need for action to combat climate change, 2022 continues to present enormous challenges for consumers, governments and businesses. Therefore, we are using our financial strength to investing in the secure energy supplies the world needs today, taking real and bold action to reduce carbon emissions and transforming our business for a low-carbon energy future,” said Shell CEO , Ben van Beurden.
By Tsvetana Paraskova for Oilprice.com
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