2nd Nov 2023 10:40
(Alliance News) - Shell PLC's third-quarter results received rave reviews, in contrast to peer BP PLC's, but there was little nod to net-zero plans, leaving questions hanging over its strategy.
The London-based oil major said in the third quarter of 2023, pretax profit fell to USD11.29 billion from USD11.44 billion, but doubled from USD5.35 billion in the second quarter. Revenue fell 20% annually to USD76.35 billion from USD95.75 billion, but was 2.4% higher than USD74.58 billion in the second quarter.
Income attributable to shareholders rose 4.5% to USD7.04 billion from USD6.74 billion a year prior, and jumped from USD3.13 billion in the second quarter. It was higher due to higher refining margins, an up tick in realised oil prices, higher liquefied natural gas trading and optimisation results and higher Upstream production. It was partly offset by lower Integrated Gas volumes.
Shell declared a third quarter dividend of USD0.331 per share, up 32% from USD0.25 a year ago and in line with its second quarter dividend.
Further, it started a new USD3.5 billion share buyback programme, which it expects to finish before the release of its 2023 result announcement on February 1. It added that it completed its USD3 billion share buyback programme it had announced when it released its half-year results.
RBC Brewin Dolphin analyst Stuart Lamont commented: "Shell's results are a contrast with BP's earlier this week, more or less matching expectations on the back of rising profits. Comparisons with last year, when oil prices first began their surge, were always going to be tough, but the company has managed to deliver. Another share buyback should be good news for shareholders, but there is little said about its plans to achieve net zero in today's update – this remains a longer term concern for many, after the company announced its decision to focus on oil and gas production earlier this year."
AJ Bell analyst Russ Mould labelled the buyback as "generous" and also noted the somewhat scarce references to net-zero.
"Investors in oil and gas stocks on this side of the Atlantic have felt short-changed relative to holders of the big US oil firms which have ignored the clamour to go green and been rewarded by the market for doing so. That informs the shift under [Shell Chief Executive Wael] Sawan since he took over at Shell at the beginning of the year. Investments will still be made in the energy transition but they will have to stack up in terms of returns," Mould added.
Shell shares were 1.4% higher at 2,694.00 pence each in London on Thursday morning.
By Eric Cunha, Alliance News news editor
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