Shell's second-quarter profit was $6.3 billion, down 19% from the first quarter but still beating analysts' expectations due to refining margins and weak oil and gas transactions.
CEO Wael · Sawan's cost-cutting efforts paid off, with strong performance in oil and gas production and retail marketing boosting performance, with profits up nearly 25% year-over-year.
Refining margins in Europe declined in Europe after two consecutive years of strong profits for Europe's leading oil and gas companies. On Tuesday, United Kingdom Petroleum (BP) raised its dividend by 10% after forecasting a profit of $2.8 billion. Last week, France's TotalEnergies reported a 6% drop in second-quarter profits due to lower refining profits. United States giants Exxon Mobil and Chevron released reports on Friday.
"We are seeing a return to the pre-2022 normalcy level in the energy system," Sawan told reporters. Energy prices soared in 2022 following Russia's invasion of Ukraine, with oil and gas companies making record profits. Shell shares closed down 0.5%, while the European Energy Index (. SXEP) fell 1%.
Sawan took office in January 2023 and under his leadership, Shell scaled back its renewables and hydrogen businesses, exited the power markets in Europe and China, and sold its refineries to focus on the more profitable oil and gas business. Shell closed several LNG deals during the quarter, highlighting its bet on LNG demand growth. Shell has also invested in new hydrogen and carbon capture projects.
Shell said it achieved $700 million in cost reductions in the first half of 2024, bringing the total reduction since 2022 to $1.7 billion, as part of its goal of achieving $2 billion to $3 billion in savings by 2025. Biraj Borkhataria, an analyst at Canada RBC Capital Markets, said: "Shell delivered another strong quarter of results, marking four consecutive quarters of earnings beating market expectations. ”
Trading is weak
Shell's second-quarter adjusted earnings, or Shell's net profit of $6 billion, beat analysts' expectations. This was up from $5.1 billion in the year-ago quarter, but down from a profit of $7.7 billion in the first quarter. Shell said it would buy back another $3.5 billion in shares over the next three months, and similar to the previous quarter, the company kept its dividend unchanged at 34 cents per share.
The quarterly decline reflected lower prices and volumes, as well as trading weakness due to lower seasonal demand in Shell's flagship LNG division. In addition, LNG production has also declined due to plant maintenance.
Shell lost US$708 million after selling its Singapore refinery. In addition, Shell suspended construction of its biofuels plant in Rotterdam, Netherlands, one of Europe's largest, a year before it was commissioned, citing a weak market, resulting in a US$783 million impairment. Shell said it expects oil, gas and LNG production to decline in the third quarter due to heavy maintenance tasks.
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文章来源：Shell Beats Forecasts With $6.3 Bln Second Quarter Profit - World-Energy
Translated and edited by China International Energy Public Opinion Center