Shell breaks record again with $11.5B profit

Shell reported a second-quarter profit of $11.5 billion, smashing its previous record just three months earlier, lifted by a tripling of refining profits and strong gas trading.

The firm also announced a share buyback program of $6B for the current quarter but did not raise its 25 cents per stock dividend. Shell said shareholder returns would remain “over 30% of cash flow from operating activities.”

A furious recovery in demand following the end of pandemic lockdowns and a surge in energy prices, driven by Moscow’s invasion of Ukraine, have boosted profits for energy firms after a two-year slump.

Shell bought back $8.5 billion of shares in the first half of 2022, and the new repurchase program is significantly higher than predictions.

Brewin Dolphin’s investment manager, Stuart Lamont, said the strong oil price backdrop had aided Shell in delivering a blockbuster set of results. The dividend may have remained the same, but the share buyback program is good news for investors.

Shell’s stock price was up 0.9% at the opening of trading at the London Stock Exchange.

French rival TotalEnergies also reported a record profit of $9.8 billion in the same quarter and accelerated its buyback program.

Oil and gas prices stayed elevated in the quarter, with benchmark Brent crude averaging about $114 a barrel. Benchmark European natural gas prices and global liquefied natural gas (LNG) prices averaged an all-time high in the second quarter of 2022.