SHEL Shell Plc

By Jaime Llinares Taboada

Shell PLC on Thursday reported a jump in its profits to a record high in the second quarter and announced a share buyback of $6 billion while keeping the dividend unchanged.

The multinational energy group generated record adjusted earnings of $11.47 billion in April-June, up from the previous high of $9.13 billion in the first quarter. Moreover, this was above the market consensus of $10.99 billion, compiled by Vara and averaged from 24 analysts' estimates.

Shell said that this reflected higher realized prices, refining margins and trading profits for gas and power--which were partially offset by weaker liquefied natural gas trading.

Net income was $18.04 billion, compared with $7.12 billion in the first quarter, as the group booked impairment reversals of $4.3 billion related to forward commodity price assumptions.

Shell said it is starting a new share buyback of $6 billion to be completed by the third-quarter results update, and declared a quarterly dividend of $0.25 a share, unchanged from three months earlier.

These shareholder distributions are higher than expected despite a flat dividend, RBC Capital Markets' analyst Biraj Borkhataria said in a note.

The FTSE 100 group noted that shareholder distributions have doubled compared with the first half of 2013, when Brent prices were at a similar level.

For the third quarter, the company expects daily production of 890,000-940,000 oil-equivalent barrels for the Integrated Gas division and 1.75 million-1.95 million for Upstream, with LNG volumes of 6.9-7.5 million metric tons. This reflects substantially more planned maintenances, strikes at the Prelude LNG facility off the coast of Australia and the exit from Salym in Russia.

In addition, Shell forecast refinery utilization at 90%-98%, marketing sales volumes of 2.35 million-2.85 million barrels a day, chemicals manufacturing plant utilization at 82%-90% and chemicals sales volumes of 3.1 million-3.6 million tons.

Shares at 0705 GMT were up 0.5% at 2,127 pence.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

July 28, 2022 03:32 ET (07:32 GMT)

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