Shell Sees Highest Profits Since 2008

Shell Plc (NYSE: SHEL) is raising its quarterly dividend after posting its highest profit since 2008, tripled from the first quarter of 2021, on the back of surging oil and gas prices. 

Shell reported on Thursday adjusted earnings of $9.1 billion for the first quarter of 2022, up from $3.1 billion for the same period last year and from $6.4 billion for Q4 2021, and also above the analyst consensus of $8.7 billion provided by the firm before the results release.

After the Q1 announcement, shares in Shell jumped by 3% in London trading at midday.

As previously announced, Shell’s decision to withdraw from its Russian joint ventures and businesses cost it a post-tax impact from impairment of non-current assets and additional charges. Shell took $3.9 billion of post-tax charges in Q1 2022 linked to its withdrawal from Russia, slightly down from the initial expectation of charges of between $4 billion and $5 billion.

As a result of the jump in profits, Shell raised its dividend for the first quarter by around 4% to $0.25 per share. The supermajor has completed $4 billion of its planned $8.5 billion share buyback program, expecting to complete the remaining $4.5 billion before the Q2 2022 results announcement.

“With the current macro outlook and subject to Board approval, shareholder distributions for the second half of 2022 are expected to be in excess of 30% of CFFO [cash flow from operations],” Shell said.

Shell is the latest supermajor to book blowout profits this earnings season, following the U.S. majors Exxon and Chevron, and its UK peer BP.

Earlier this week, BP reported a quarterly profit more than doubled from last year’s first quarter and far exceeding analyst expectations, thanks to high oil prices and what it described as an “exceptional” oil and gas trading business.