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Key takeaways

  • Shell’s adjusted profit fell by 32 percent in the second quarter to 4.26 billion dollars (3.71 billion euros) due to lower trading margins and lower oil and gas prices.
  • Despite the lower profit, Shell continues to create value for shareholders through a share buyback program of 3.5 billion dollars (3.07 billion euros) in the third quarter.
  • Shell’s net debt rose in the second quarter to 43.21 billion dollars (37.86 billion euros), drawing criticism from environmental groups concerned about the company’s commitment to reducing CO2 emissions.

Shell’s adjusted profit for the second quarter of 2023 amounted to 4.26 billion dollars (3.71 billion euros), a decrease of 32 percent compared to the 6.29 billion dollars (5.47 billion euros) earned in the same period last year. This decline is attributed to lower trading margins and lower oil and gas prices. The average price of Brent crude at the end of June was less than 68 dollars per barrel (59.2 euros per barrel), well below the 86 dollars per barrel (74.8 euros per barrel) of a year earlier. This is evident from the quarterly figures.

Shell remains committed to shareholder returns

Despite this drop in profit and the increase in net debt, Shell remains committed to returning value to its shareholders through share buyback programs. The company has announced a share buyback plan of 3.5 billion dollars (3.07 billion euros) for the third quarter.

Shell CEO Wael Sawan emphasized the company’s strong operational performance in a challenging economic climate. He pointed to the achievement of 3.9 billion dollars (3.42 billion euros) in structural cost savings since 2022, mainly through non-portfolio-related actions. These efforts enabled Shell to launch a new buyback program of 3.5 billion dollars (3.07 billion euros) in the coming three months, marking the fifteenth consecutive quarter in which buybacks exceeded 3 billion dollars (2.63 billion euros).

Shell’s net debt rises despite criticism

Shell’s net debt rose in the second quarter to 43.21 billion dollars (37.86 billion euros), compared to 38.3 billion dollars (33.56 billion euros) a year earlier. The company’s continued profitability has drawn criticism from environmental groups, especially after Shell abandoned its targets for decarbonizing the economy last year.

Analysts such as Keith Bowman of Interactive Investor have pointed out that Shell’s diverse oil, gas, chemicals, and retail activities often allow one sector to offset weakness in another. (uv)

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