Shell posts record earnings with $11.5bn profit in Q2

Shell Energy has reported a profit of $11.5 billion in the second quarter of 2022, smashing the mark it set only three months ago as oil and gas prices surged and refining margins spiked.

Findings by BusinessDay showed the Q2 earnings are up from $5.5bn in April-June 2021- marking a $6bn increase in profits- and up from $9.1 billion in the first quarter of 2022.

The oil giant recorded a fourteen-fold increase in quarterly profits earlier this year which reignited calls for a windfall tax to relieve the burden on struggling families during the worsening cost of living crisis.

The higher earnings mainly reflected higher realized prices, higher refining margins, and higher gas and power trading and optimisation results, Shell said.

“With volatile energy markets and the ongoing need for action to tackle climate change, 2022 continues to present huge challenges for consumers, governments, and companies alike. Consequently, we are using our financial strength to invest in secure energy supplies which the world needs today, taking real, bold steps to cut carbon emissions, and transforming our company for a low-carbon energy future,” Shell CEO Ben van Beurden said.

Cash flow from operating activities jumped by 26percent sequentially to $18.655 billion.

Read also: Shell halts plan to sell Nigerian onshore oil assets

Following the record results, Shell announced a share buyback program of $6 billion, which is expected to be completed by the third-quarter 2022 results announcement. These share repurchases will add to the $8.5 billion buyback program for the first half of 2022, which was completed in early July.

“With the current energy sector outlook and subject to Board approval, shareholder distributions are expected to remain in excess of 30 percent of cash flow from operating activities,” Shell said.

Analysts had expected Europe’s biggest firms—Shell, BP, and TotalEnergies—to boost share repurchases, and some also anticipated that Shell could announce a further dividend increase on the back of another set of blockbuster results for the second quarter.

But Shell did not. The supermajor left its dividend unchanged at $0.25 per share for the second quarter.

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