Shell posts £10.9bn profit after second quarter beats expectations
The energy giant saw a slowdown in earnings over the three months to June after previously warning about lower fossil fuel prices.
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Your support makes all the difference.Oil firm Shell has revealed profits of 14 billion dollars (£10.9 billion) for the first half of the year after a stronger-than-expected second quarter.
The energy giant saw a slowdown in earnings over the three months to June after previously warning about lower fossil fuel prices, refining margins and an impairment hit linked to plants in Singapore and Rotterdam.
Nevertheless, it still delivered 6.3 billion dollars (£4.9 billion) of earnings for the period, surpassing analyst guidance.
We continue to demonstrate that we are delivering more value with less emissions
Shell told shareholders on Thursday that earning were 19% lower quarter-on-quarter due to weaker liquified natural gas (LNG) trading and refining profitability.
The company somewhat offset this through stronger profit margins and total volumes in its marketing division.
The company also confirmed plans for further returns to shareholders through an extended 3.5 billion dollar (£2.7 billion) share buyback programme.
Chief executive Wael Sawan said: “Shell delivered another strong quarter of operational and financial results.
“We further strengthened our leading LNG portfolio, and made good progress across our Capital Markets Day 2023 financial targets, including 1.7 billion dollars of structural cost reductions since 2022.
“We continue to demonstrate that we are delivering more value with less emissions.”
The update showed that Shell posted a 187 million dollar (£147 million) loss in its renewables business, while it reduced its pipeline of renewable projects from 4.6.GW to 3.8GW for the past half-year.
Last month, it paused construction on its major biofuel plant in Rotterdam.
Bosses at the company stressed on Thursday that it will still be on target to meet carbon reduction targets, with it set to have invested between 10 and 15 billion dollars (£7.8 billion to £11.8 billion) between 2023 and 2025.
The fresh results came amid an update of political upheaval, with a raft of major elections across the world this year and potential for changes to energy policy and tax regimes.
Earlier this week, the new Labour Government in the UK confirmed it would increase energy windfall taxes.
Chancellor Rachel Reeves said it would increase the Energy Profits Levy by three percentage points and remove a 29% investment allowance in order to draw in more tax revenues.
Mr Sawan told reporters that Shell has been engaging with new governments, including in the UK.
“We have been engaging with the UK Government and expect to speak more with them in the coming week,” he said.
“We are a willing partner for any government as long as we recognise that there is strategic sense, and we have backed that up with a lot of investment in recent years.
“The one thing we do wish to see will be stability in policy and an ecosystem that allows us to grow with our investments.”
It comes days after rival BP also posted higher-than-expected profits, despite write-downs and weaker refining margins.