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Shell (NYSE: SHEL) intends to lift its dividend and is launching a new share buyback program after reporting its second-highest quarterly earnings for Q3, second only to the record profit for the previous quarter.
Shell reported on Thursday adjusted earnings—the measure most closely watched by analysts—of $9.454 billion for the third quarter, in line with Refinitiv’s forecast of $9.5 billion. This was the second-highest quarterly profit for Shell ever, after the record earnings of $11.472 billion for the second quarter.
Shares in Shell shot up by more than 2% at opening in London after the release of the results.
For the third quarter, Shell saw lower earnings from its gas division, as it had already flagged earlier this month.
The Q3 adjusted earnings below Q2 levels mainly reflected lower trading and optimization results in addition to lower volumes, including the impact of maintenance and the strike at the Prelude LNG in Australia, Shell said. The trading and optimization results in gas were “impacted by seasonality and supply constraints, coupled with substantial differences between paper and physical realisation in a volatile and dislocated market.”
Shell’s refining margins were lower in the third quarter, due to a recovery in global product supply to meet demand. Chemicals margins were also lower compared to Q2, due to higher feedstock and utility costs.
Nevertheless, Shell said it delivered “robust results from a resilient portfolio.”
“Today we are announcing a new share buyback programme resulting in an additional $4 billion of distributions, which we expect to complete by our Q4 2022 results announcement. Furthermore, we plan to increase the dividend per share (DPS) for the fourth quarter, which will be paid in March 2023, by an expected 15%, subject to Board approval,” CEO Ben van Beurden said in a statement.
The new share repurchase program is expected to be completed by the time the supermajor announces Q4 2022 results in early February 2023.
So far this year, the announced 2022 shareholder distributions are around $26 billion, Shell said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.