Shell ups dividend, trims buyback as oil price strength boosts profit
Shell PLC on Thursday rejigged its shareholder returns, as it reported higher first quarter profits, placing more emphasis on growing dividends while slowing the pace of share buybacks.
Shares in the London-based oil major were down 2.9% at 3,121.00 pence each in London on Thursday morning, with the FTSE 100 0.6% lower.
Shell said adjusted earnings rose 24% to $6.92 billion in the first quarter from $5.58 billion the year prior, ahead of company compiled consensus of $6.36 billion.
Adjusted earnings benefited from higher oil prices, higher refining margins, lower operating expenses and higher Lubricants margins, partly offset by lower volumes, Shell said.
Adjusted earnings before interest, tax, depreciation and amortisation climbed 16% to $17.74 billion from $15.25 billion, beating $16.73 billion consensus.
Shell Chief Executive Officer Wael Sawan said Shell delivered ‘strong’ results in a quarter marked by ‘unprecedented’ disruption in global energy markets.
Cash flow from operating activities fell to $6.06 billion from $9.28 billion, with free cash flow down to $2.93 billion from $5.32 billion.
Working capital outflows were $11.2 billion mainly reflecting the impact of commodity prices on inventory and accounts receivables.
Basic earnings per share improved to $1.01 from $0.79, or to $1.22 from $0.92 on an adjusted basis.
Sawan said Shell was ‘rebalancing’ shareholder distributions, as it announced an increased dividend and a slower pace of share buybacks.
The dividend was hiked to 9.1% on-year to $0.3906 per share from $0.3580. On a sequential basis, the payout was lifted 5.0% from $0.3720 per share. Shell previously aimed for roughly 4% annual dividend growth. The quarterly share buyback was trimmed to $3 billion from $3.5 billion.
The buyback is expected to be completed by the time of second quarter results.
Looking ahead, Shell forecast 2026 capex of $24 billion to $26 billion, including the recent ARC Resources Ltd acquisition. At the time of its 2025 results, Shell forecast 2026 capex of $20 to USD billion.
It left the 2027 to 2028 capex outlook unchanged at $20 billion to $22 billion.
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