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Shell PLC on Thursday said profit and revenue in the first half of 2023 fell, with performance weighted to the first quarter, while it announced another $3 billion share buyback programme.
The London-based oil major said pretax profit almost halved to $19.70 billion in the first half of 2023 from $36.94 billion a year earlier.
Revenue also fell 12% to $161.54 billion from $184.26 billion. Total expenditure fell 2.7% to $145.34 billion from $149.31 billion.
Shell said its falling half-year performance reflected lower realised oil and gas prices, lower volumes and lower refining margins, partly offset by higher Mobility margins.
Upstream segment earnings were down 54% to $4.37 billion in the first half from $9.49 billion a year earlier, Integrated Gas fell 72% to $3.16 billion from $11.18 billion, while Chemical & Products was down 33% to $2.15 billion from $3.20 billion.
Renewable & Energy Solutions swung to positive segment earnings of $2.73 billion from a loss of $1.71 billion, while Marketing segment earnings more than doubled to $2.11 billion from $1.00 billion.
On production, Shell said total production available for sale in the first half fell 3.9% to 2.8 million barrels of oil equivalent per day from 2.9 million per day. Upstream production fell 9.2% to 1.8 million per day from 2.0 million per day, while Integrated Gas rose 6.3% to 978,000 barrels per day from 920,000 barrels per day.
The wider group’s falling first half performance was weighted to the second quarter, with pretax profit down 63% to $5.35 billion from $14.35 billion in the first quarter of 2023. Compared to the second quarter of 2022, pretax profit was down 80% from $26.16 billion.
Revenue in the second quarter of 2023 fell 14% to $74.58 billion from $86.96 billion in the first quarter of 2023 and down 25% from $100.06 billion in the second quarter of 2022.
Despite wider falling performance, Shell announced a further $3 billion share buyback programme, which it expects to complete by the time it announces its third quarter results.
Shell also indicated intentions of announcing at least a further $2.5 billion in buybacks with its third quarter results, while it completed its $4 billion share buyback programme across the second quarter, having announced the buyback with its first quarter results.
The company declared a quarterly dividend of $0.331, up 15% from $0.2875 for the first quarter, which Chief Executive Officer Wael Sawan evidenced ‘delivering on our capital markets day committment’.
‘Shell delivered strong operational performance and cash flows in the second quarter, despite a lower commodity price environment,’ said Sawan.
‘As we deliver more value with less emissions, we will continue to prioritise share buybacks, given the value that our shares represent.’
Looking ahead, Shell said it lowered its cash capital expenditure outlook for 2023 to $23 billion to $26 billion. At the first quarter, it maintained guidance in the range of $23 billion to $27 billion.
It expects third quarter Integrated Gas production to be in the range of 870,000 to 930,000 barrels of oil equivalent per day, down 4.9% to 11% from the second quarter, alongside 1.6 million to 1.8 million barrels per day in its Upstream division, ranging from steady to down 11%.
Shares in Shell were down 1.6% to 2,358.00 pence each in London on Thursday morning.
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