Shell kept up the pace of share buybacks as first-quarter profit dropped less than expected, maintaining the focus on shareholder returns that has become a hallmark of the oil majors.
The London-based energy producer said it would repurchase US$3.5 billion of shares in the second quarter, matching the amount in the preceding two reporting periods. Shell has made dividends and buybacks a priority as it seeks to close the valuation gap with its US peers, and last year it returned a total of US$23 billion to shareholders.
“Shell delivered another quarter of strong operational and financial performance,” chief executive officer Wael Sawan said in a statement on Thursday (May 2).
Shell’s adjusted net income for the first quarter was US$7.73 billion, down from US$9.65 billion a year earlier, according to the statement. That beat the average analyst estimate of US$6.25 billion, according to data compiled by Bloomberg.
Results were buoyed by higher contributions from Shell’s oil and chemicals trading units, according to the statement. Gas trading earnings were strong, albeit lower than the “exceptional” performance seen in the fourth quarter.
The company kept a lid on spending, with US$4.49 billion of cash capital expenditure in the first quarter, according to the statement. That’s about US$2 billion less than a year earlier and down from US$7.11 billion in the prior period. For the whole of 2024 that figure is expected to be between US$22 billion and US$25 billion.
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Sawan has pledged to be very selective with investments, focusing on high-return businesses. On Wednesday, the company announced that it had exited its power business in China, following similar moves in the UK and Germany household retail space. BLOOMBERG
