Shell profits dip but beat estimates amid $3.5bn share buyback
Shell (SHEL.L) reported a drop in third-quarter profits, driven by weaker crude oil prices, but said it would keep the pace of its share buyback programme at $3.5bn over the next three months, marking the 16th consecutive quarter of such buybacks.
The oil (CL=F, BZ=F) major posted adjusted earnings of $5.4bn (£4.09bn) for the quarter, exceeding analysts’ expectations of $5.05bn, according to an LSEG-compiled consensus. A separate forecast from the company had anticipated a third-quarter profit of $5.09bn.
This is down from the $6bn Shell (SHEL.L) reported in the same period last year, but represents a 27% increase from the $4.26bn in the second quarter of 2023.
Adjusted earnings are a closely watched metric that strips out certain commodity-price adjustments and one-time charges.
Income attributable to shareholders rose to $5.3bn from $3.6bn in the previous quarter and $4.3bn a year earlier. Adjusted EBITDA increased to $14.8bn from $13.3bn.
The UK oil (CL=F, BZ=F) major was helped by the start-up of its $40bn liquefied natural gas project in Canada. LNG Canada, which started production in July, is expected to ship 14mn tonnes of liquefied natural gas from Canada’s west coast to Asia each year, equivalent to roughly the annual consumption of Singapore and Vietnam combined in 2024.
Despite the drop in profit, Shell’s (SHEL.L) performance continues to outperform its industry peers. The company’s London-listed shares have climbed more than 16% year-to-date.
Chief executive Wael Sawan said: “Shell (SHEL.L) 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 $3.5bn of buybacks for the next three months.”
Cash flow from operations came in at $12.2bn for the quarter, compared with $14.7bn during the same quarter of last year.
Shell (SHEL.L) reduced net debt to $41.2bn from $43.2bn in the prior quarter, lowering gearing to 18.8%. The company returned $5.7bn to shareholders, including $3.6bn in buybacks and $2.1bn in dividends.
The quarterly dividend was maintained at $0.358 per share.
By segment, the integrated gas division saw a 28% increase in income quarter-on-quarter, reaching $2.36bn. This was driven by stronger trading and optimization results, alongside an 8% rise in LNG liquefaction volumes as maintenance schedules eased and LNG Canada ramped up production. Adjusted earnings for this segment rose 23% to $2.14bn.
In contrast, upstream income fell by 15% to $1.71bn, affected by higher depreciation and Brazil-related adjustments. However, production volumes were up, benefiting from new output and reduced maintenance.
The chemicals and products segment swung to a $1.07bn profit from a $174m loss in the previous quarter, fueled by higher refining and trading margins.
Marketing income dropped to $576m, down from $766m, as a result of seasonal margin fluctuations and impairments linked to Shell’s (SHEL.L) decision to cancel the Rotterdam biofuels project.
The Renewables and Energy Solutions division returned to profitability, posting a $110m profit, compared to a $254m loss in Q2. This improvement was attributed to gains in trading.
Looking ahead to the fourth quarter, Shell (SHEL.L) guided capital expenditure between $20bn and $22bn for 2025. The company also expects its integrated gas production to range between 920,000 and 980,000 barrels of oil (CL=F, BZ=F) equivalent per day (boe/d), while upstream production is projected to be between 1.77m and 1.97m boe/d.
Refinery utilization is forecasted to be between 87% and 95%, with corporate adjusted losses estimated at $600m–800m.
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