Shell prepares fresh shareholder payouts as profits soar

Shell plans to hand a further $3.5billion to investors before the end of the year after profits came in higher than expected for the third quarter of the year.

The energy giant revealed it would commence the share buyback programme, worth around £2.7billion in sterling terms, after higher sales volumes and trading margins boosted profits over the period.

It follows $5.7billion in shareholder payouts over the third quarter, comprising share buybacks worth $3.6billion and cash dividends of $2.1billion.

The group posted adjusted earnings of $5.43billion for the quarter, beating guidance and marking 27 per cent growth on the previous quarter.

However, the total is lower than the $6billion posted last year, reflecting lower oil and gas prices.

Shell said volumes improved against the previous quarter and flagged a $161million benefit from favourable tax write-offs over the quarter.

Shell boss Wael Sawan said the group overcame ‘continued volatility’

It did however highlight that some of those benefits were offset by higher depreciation, depletion and amortisation expenses.

Chief executive Wael Sawan said: ‘Shell delivered another strong set of results, with clear progress across our portfolio and excellent performance in our marketing business and deepwater assets in the Gulf of America and Brazil.

‘Despite continued volatility, our strong delivery this quarter enables us to commence another $3.5billion of buybacks for the next three months.’

Shell shares were down 0.2 per cent in early trading to 2,870p in early trading.

Adam Vettese, market analyst for eToro says: ‘Shell appears to have shrugged off oil price volatility with a robust third-quarter performance.

‘The quarter was marked by record production in Brazil and the Gulf of America, driving strong upstream results alongside the Marketing division’s second-best quarterly earnings in over a decade. 

‘However, growth in renewables remains modest, with limited earnings contribution, highlighting the challenges ahead in energy transition. 

‘For investors, Shell offers a compelling income story with steady dividends and buybacks backed by resilient cash flows and operational strengths. 

‘Shares have recently traded close to the highest level we have seen in the last year, investors will want to see the company continue this momentum in subsequent quarters for shares to push on further.’ 

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