29th Jul 2021 09:33
(Alliance News) - Royal Dutch Shell PLC on Thursday said it plans to boost shareholder returns, upping its quarterly payout and unveiling a USD2 billion buyback.
The plans come on the back of the oil major setting aside its net debt target earlier in July, a move which paved the way for increased shareholder returns.
In London on Thursday morning, Shell's A stock was 3.4% higher at 1,453.20 pence, with its B shares rising 3.8% to 1,436.20p.
Also on Thursday, Shell posted stronger results for the second quarter of 2021.
It swung to a USD3.43 billion profit attributable to shareholders, from a USD18.13 billion loss a year earlier, and posted pretax profit of USD4.13 billion, swinging from a USD23.91 billion loss a year prior.
Second quarter total revenue, so including joint-ventures, surged 90% to USD61.76 billion from USD32.49 billion.
For the whole of the first half, total revenue was up 29% annually to USD120.88 billion, while pretax profit totalled USD12.37 billion, swinging from USD23.28 billion loss.
Shell hailed "another quarter of strong operational and financial delivery".
On payouts, Shell rebased its second quarter dividend to 24 US cents, up 38% quarter-on-quarter. For the second quarter of last year, it had declared a 16 cents payout. In addition, Shell is targeting USD2 billion in buybacks which it aims to complete by the end of 2021.
Chief Executive Ben van Beurden said: "We are stepping up our shareholder distributions today, increasing dividends and starting share buybacks, while we continue to invest for the future of energy."
He added: "Total shareholder distributions for 2021 are expected to be around the middle of the 20-30% range of [cash flow from operations] from the previous four quarters. Our progressive dividend policy to grow dividends per share by 4% annually, subject to board approval, remains unchanged."
Earlier in July, Shell unveiled its aim to lift shareholder distributions and said it will retire its USD65 billion net debt target. It came after the company back in April had said it planned to ramp up shareholder returns in the form of share buybacks or further increases to its dividend payments, but only after hitting its net debt target.
Second quarter net debt was trimmed to USD65.74 billion from USD71.25 billion at the end of March.
The well-received quarterly update came with some hints of caution, however. Shell warned third quarter production in its integrated gas, renewables & energy solution will be "impacted" by maintenance work. In Upstream, it cautioned output in the third quarter will be hurt by "lower seasonal gas demand.
By Eric Cunha; [email protected]
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