The Shell logo is displayed outside a gas station in Radstock, Somerset, England, February 17, 2024.
Matt Cardi | Getty Images News | getty images
British oil giant husks On Thursday, it reported a slight decline in third-quarter profit compared to the same quarter last year as plummeting oil prices and lower refining margins were partially offset by higher gas sales.
The energy company reported adjusted revenue of $6 billion from July to September, beating analyst expectations of $5.3 billion, according to estimates compiled by LSEG.
Shell reported adjusted earnings of $6.3 billion in the second quarter and $6.2 billion in the third quarter of 2023.
Shell said it would buy back an additional $3.5 billion of shares over the next three months and would keep its dividend unchanged at 34 cents per share.
This is the 12th consecutive quarter that Shell has announced at least $3 billion in share buybacks, Shell Chief Financial Officer Sinead Gorman said in a video presentation.
“This quarter, we delivered another strong result despite a less favorable macro environment,” Gorman said.
“This continues the momentum we have built over recent quarters, driven by strong operating performance across our portfolio,” she added.
Net debt at the end of the third quarter was $35.2 billion, down from $40.5 billion in the same period last year.
Shares in the London-listed company rose 1% on Thursday morning.
‘Strong position’
Shell said its third-quarter free cash flow was $10.83 billion, up from $7.5 billion a year ago.
Meanwhile, cash capital expenditures were $4.95 billion, down from $5.65 billion in the third quarter of 2023.
Maurizio Carulli, energy analyst at asset manager Quilter Cheviot, said Shell’s third-quarter performance was “much better than expected on almost every level” and showed the company “continues to implement its strategy of portfolio rationalization, cost reduction and operational improvement.” “I will give it to you,” he said. .”
“Furthermore, Shell is number one in the world in liquefied natural gas (LNG), a business it created from scratch with tremendous foresight back in the 70s,” Carulli said, noting that LNG is the only segment of the oil and gas industry expected to grow. I mentioned it. Practically for the next decade.
“This puts the business in a strong position to overcome volatility in commodity prices and take advantage of competitors’ struggles,” he added.
Earlier this week, British rival BP reported its weakest quarterly results in nearly four years due to falling refining margins.
BP reported underlying replacement cost profit, used as a proxy for net income, of $2.3 billion in the third quarter. This exceeded analysts’ expectations but reflected a sharp decline compared to the same period a year ago.
Oil prices plunged more than 17% in the third quarter due to concerns about the outlook for global oil demand.
Clean energy investment
Shell came under fire on Thursday from activist shareholder group Follow This. The company highlighted the oil major’s third-quarter earnings as its investments in the renewable energy and energy solutions segment fell from 9% to 8% of the company’s total capital expenditures. .
The decline in clean energy investment comes after Shell weakened its 2030 carbon emissions reduction target in March.
Shell said in an update to its energy transition strategy at the time that it would moderate near-term carbon emissions reductions while maintaining its commitment to become a net-zero company by mid-century.
“By continuing to invest in fossil fuel expansion, Shell’s board is jeopardizing the company’s future,” Mark van Baal, founder of Follow This, said in a statement.
He added: “The increase in fossil fuels will make the transition to renewables more difficult every year, delaying the transition and increasing the risk of carbon lock-in.”
Shell said Thursday that the company has seen several “significant developments” in its renewable energy and energy solutions business in recent months.
“One example is in Norway, where our Northern Lights joint venture has now completed construction. The project is ready to begin permanently storing CO2 to help decarbonize European industry,” Gorman said.
“Last week, we announced the acquisition of the Rhode Island Combined Cycle Power Plant, which is expected to see increased demand due to electrification and associated decarbonization efforts,” she added.
Shell has previously said it plans to decarbonize profitably and plans to invest $10 billion to $15 billion in low-carbon energy solutions between 2023 and the end of next year.
