Shell raises share buyback as quarterly earnings beat expectations

Shell PLC on Thursday increased the pace of its share buybacks as higher oil prices helped it deliver better-than-expected third quarter results.

The London-based oil major said pretax income surged to USD17.99 billion in the quarter ended September 30 from USD7.92 billion a year earlier.

Revenue rose 36% to USD92.85 billion from USD68.15 billion, although it fell from USD94.66 billion in the second quarter.

Basic earnings per share more than doubled to USD2.15 from USD0.91 a year earlier.

Adjusted earnings rose to USD10.81 billion from USD5.43 billion a year ago, beating USD10.33 billion consensus compiled for Shell by Vara.

This was supported by higher refining margins, higher realised liquefied natural gas prices and higher Integrated Gas volumes, partly offset by lower crude and oil products trading and optimisation, higher well write-offs and lower realised liquids prices.

By division Integrated Gas adjusted earnings of USD3.04 billion were 4% ahead of consensus and Chemicals & Products earnings of USD3.86 billion beat consensus by 3% driven by higher margins.

Adjusted earnings before interest, tax, depreciation and amortisation increased to USD22.74 billion from USD14.77 billion year-on-year, beating consensus of USD21.74 billion.

Cash flow from operations stands at USD21.04 billion, versus USD12.21 billion the year prior, despite Middle East disruptions, comfortably beating consensus of USD16.55 billion.

Chief Executive Wael Sawan said: "Shell's relentless focus on operational performance enabled very strong results in a quarter with continued severe disruption to the global energy system."

Shares in Shell were up 3.1% at 4,077.00 pence each in London on Thursday morning, supporting the FTSE 100 which was up 0.5%.

The oil major announced a further USD5 billion share buyback programme over the next three months and expects full-year cash capital expenditure of USD23 billion to USD25 billion, including its acquisition of ARC Resources.

The buyback was above the recent USD3 billion quarterly run-rate and ahead of expectations.

In addition, a dividend of USD0.3906 per share was declared, up from USD0.358 the year prior.

Shell said investments in Integrated Gas business with the completion of the ARC Resources

acquisition and the final investment decision on LNG Canada Phase 2, will support long-term cash flow growth.

Net debt totalled fell to USD39.7 billion from USD41.2 billion a year ago.

Looking ahead, Shell expects full-year capex of USD23 billion to USD25 billion compared with USD21 billion in 2025.

For the fourth quarter, Shell expects Integrated Gas production to be around 1,080 to 1,180 thousand barrels of oil equivalent per day.

LNG liquefaction volumes are expected to be around 7.3 to 7.9 million tonnes. This includes the impact of the ARC Resources acquisition, completed in September.

Upstream production is expected to be approximately 1,700 - 1,900 thousand boe/d, including an allowance for weather related impacts in the Gulf of Mexico.

Marketing sales volumes are expected to be around 2,400 to 2,600 thousand b/d.

Refinery utilisation is expected to be 92% to 100% and Chemicals manufacturing plant utilisation 78% to 86%.

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