Shell reports $6.2bn Q3 profit, $3.5 bn share buyback amid rising oil prices

By Kingsley Odii

Shell, the British oil giant, has announced a third-quarter profit of $6.2 billion in line with market expectations. The company’s profit exceeded the $5.1 billion reported in the second quarter, but saw a significant decline compared to the $9.45 billion recorded a year ago. The boost in profit was attributed to higher oil prices and refining margins.

Analysts had predicted adjusted earnings of $6.48 billion, according to the LSEG-compiled consensus.

Shell’s CEO, Wael Sawan, stated that the company had delivered a strong operational and financial performance, capitalizing on opportunities in volatile commodity markets.

“The $6.5 billion set for the second half of the year was now “well in excess” of the $5 billion announced in June. Shell delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets,” Wael said.

Additionally, Shell revealed plans for a $3.5 billion share buyback to be completed over the next three months. This buyback exceeds the previously announced $5 billion for the second half of the year. Despite the positive financial results, concerns remain regarding Shell’s progress in its decarbonization programme.

The company’s free cash flow decreased from $12.1 billion in Q2 to $7.5 billion, while cash capital expenditure rose from $5.1 billion to $5.6 billion. Shell’s renewables and energy solutions division reported a $67 million loss, primarily due to seasonal effects and lower trading. Capital expenditure in this division reached $659 million.

Oil prices have been on the rise throughout Q3 due to factors such as supply cuts in Saudi Arabia and Russia, as well as escalating conflicts in the Middle East. The International Energy Agency has cautioned that oil markets will remain uncertain due to these tensions.

Shell’s Q3 results come amidst criticism regarding the company’s decarbonization efforts, including from its own shareholders. To address this concern, Shell recently announced job cuts within its low-carbon solutions unit. The company’s focus on oil and gas production continues to be a long-term concern for many stakeholders.

Despite these challenges, Shell’s London-listed shares rose by 1.1% at 8:30 a.m. on Thursday, suggesting investor confidence in the company’s performance for the final quarter of the year.


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