Shell unveils £3.2bn share buyback programme after posting mega profits
Shell has announced a £3.2bn ($4bn) share buyback programme, after the energy giant posted bumper profits of £7.6bn ($9.6bn) during the first three months of this year.
The latest buyback programme is expected to be completed by the announcement of its second quarter later this year.
It credited its robust takings to its improved operational performance, lower costs, and the rebounding of its chemicals and products division.
These factors offset declining oil and gas prices, which remained historically elevated in the first quarter of 2023 – but well below last year’s record levels.
The London-listed energy giant’s latest results follow rival BP earlier this week posting £4bn in profits – which has seen Labour intensify calls for a toughened windfall tax.
There has also been push back from North Sea industry operators and Conservative MPs over the proposals, with oil and gas exploration a key feature in the government’s energy security strategy.
Shell and shareholders
Shell’s latest buyback announcement follows £5bn of shareholder distributions in the first quarter, of which £1.6bn was dividend payments and £3.4bn was share buybacks.
Overall, Shell expects to hand £9.5bn back to shareholders through dividends and stock buybacks in the first half of 2023.
That includes £6.3bn of share buybacks and around £3.2bn of dividends.
Meanwhile, cash flows from operations rose to £11.3bn over the first three months of trading, while net debt fell from £35.6bn to £35.1bn.
The 2023 cash capex outlook is also unchanged at £18.3bn to £21.5bn.
Shell’s earnings were above not just BP but also Stateside rival Chevron which posted £5.3bn profits – although less than Exxon Mobil’s £9.17bn monster earnings.
Wael Sawan, chief executive, said: “In the first quarter, Shell delivered strong results and robust operational performance, against a backdrop of ongoing volatility, while continuing to deliver vital supplies of secure energy. We will commence a $4bn share buyback programme for the next three months as part of our commitment to deliver attractive shareholder returns.”
Alongside the headline figures, Shell has strengthened its portfolio with the acquisition of Nature Energy a renewable natural gas producer, Denmark, and the restart of Pierce (UK) facilities.
The company has also pledged to spend £25bn on domestic energy projects over the current decade.