Yahoo Finance FTSE 100: Shell launches $3.5bn share buyback as profits hit $6.2bn
Shell (SHEL.L) will hand its shareholders $3.5bn (£2.9bn) in share buybacks as it reported quarterly profit of $6.2bn (£5.1bn), helped by oil prices rising again.
The London-listed oil and gas producer said its adjusted earnings fell 34% in the three months to September with a year earlier, landing at a little over 6.2bn (£5.1bn).
Shell said that while it would keep its dividend unchanged at $0.331 per share, it was to raise awards via share buybacks.
Chief executive officer, Wael Sawan, said the oil company would hand shareholders $6.5bn in share buybacks over the second half of the year, “well in excess of the $5bn announced at Capital Markets Day in June”.
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In total, the company’s shareholder payouts for 2023 stand at $23bn, he said.
"Shell delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets,” Sawan said.
"We continue to simplify our portfolio while delivering more value with less emissions," he added.
The size of the payouts was criticised by Jonathan Noronha-Gant a campaigner at Global Witness.
“Shell’s shareholders remain some of the biggest winners of Russia’s brutal war in Ukraine and ongoing global instability.
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“The turmoil in fossil fuel markets allows Shell to rake in enormous profits – but instead of investing in clean energy, the company has doubled down on oil, gas, and shareholder pay-outs.”
This summer Shell abandoned its target to reduce oil production by 1-2% every year until 2030, saying it had met the target early by selling off some of its assets meaning another company, not it, is responsible for the oil fields.
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The company has also confirmed that it will cut 200 positions within its low-carbon solutions unit in 2024.
“Another share buyback should be good news for shareholders, but there is little said about its plans to achieve net zero in today’s update – this remains a longer term concern for many, after the company announced its decision to focus on oil and gas production earlier this year,” Stuart Lamont, investment manager at RBC Brewin Dolphin, said in a note.
“With the geopolitical environment still volatile, oil prices look likely to continue recent rises which should mean a strong final quarter for Shell.”
BP (BP.L) on Tuesday posted a year-on-year fall in third-quarter profit from $8.15bn to $3.29bn.
Watch: Shell Accelerates Pace of Share Buybacks as 3Q Profit Rises
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