Shell broke the record again with a profit of 11.5 billion dollars

General view of the Shell gas station signal in Milton Keynes, Britain, January 5, 2022. REUTERS/Andrew Bowers/File Photo GLOBAL BUSINESS WEEK AHEAD

LONDON, July 28 (Reuters) – Shell Corporation (coincidence) On Thursday, it announced second-quarter profit of $11.5 billion, smashing the previous record just three months ago, buoyed by a tripling of refining earnings and strong gas trading.

The company also announced a $6 billion share buyback program for the current quarter, but it didn’t raise its dividend by 25 cents per share. It said shareholder returns would still “exceed 30% of cash flow from operating activities.”

The rapid recovery in demand after the end of pandemic lockdowns and rising energy prices, spurred by Russia’s invasion of Ukraine, boosted energy companies’ profits after a two-year slump. Read more

Shell bought back $8.5 billion of stock in the first half of 2022, and the new buyback program far exceeded expectations.

“The strong oil price backdrop has helped Shell deliver a huge set of results. Earnings may have stayed the same, but the share buyback program is positive news for shareholders,” said Stuart Lamont, chief investment officer at Brewin Dolphin.

Shell shares rose 0.9% at the opening of trading in London.

France’s TotalEnergies competitor (TTEF.PA) On Thursday, it also announced a record $9.8 billion profit in the first quarter and an acceleration of its buyback program. Read more

Equinor Norway (EQNR.OL) It raised its own dividend and boosted share buybacks on Wednesday. Read more

US rivals ExxonMobil and Chevron announced the results on Friday.

Oil and gas prices remained high in the quarter, with Brent crude averaging around $114 a barrel. Average European benchmark natural gas prices and global LNG prices reached an all-time high this quarter.

Enhanced refining

Shell’s adjusted second-quarter profit rose to $11.47 billion, above the $11 billion forecast by analysts in a survey provided by the company.

That was up from $5.5 billion in the previous year and from $9.1 billion in the first quarter of 2022.

The company said Shell’s strong results reflected higher energy prices and refining margins as well as strong gas and energy trading, but was partially offset by lower LNG trading results.

Refining profit margins tripled in the quarter to $28 a barrel. It has weakened significantly in recent weeks amid signs of declining gasoline demand in the US and Asia.

Shell said that its use in its refineries will rise to 90-98 percent in the third quarter, compared to 84 percent in the second quarter.

Its oil and gas production in the second quarter was down 2% from the previous quarter to 2.9 million barrels of oil equivalent per day (boepd).

Shell’s LNG liquefaction volumes were 7.66 million tons in the second quarter, down from 8 million tons in the previous quarter. Volumes are expected to drop to between 6.9-7.5 million in the third quarter due to strikes at the Australian Prelude site and planned maintenance.

Shell used the increase in cash generation to further reduce its debt, which amounted to $46.4 billion at the end of June, compared to $48.5 billion three months ago. The debt-to-capitalization ratio decreased to 19.3%.

(Covering) Ron Bousso and Shadia Nasrallah Editing by Jason Neely and Mark Potter

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