Shell Plc reports second-highest profit and plans to increase dividend

Shell Plc plans to increase dividends after the release of data on the second-highest earnings ever.

A streak of strong earnings boosts shareholder rewards and also keeps the oil industry at the forefront of governments battling high energy costs. At the same time, earnings were slightly lower than expected, and the company’s debt level rose.

Shell plans to repurchase another $4 billion worth of shares over the next three months, bringing the total repurchases for the year to $18.5 billion. The company wants to increase its dividend by 15% for the fourth quarter, subject to board approval.

The company’s shares rose 0.4% to 2307.5 pence this morning in London.

Companies from the energy industry also reported earnings. TotalEnergies SE reported another record profit, while Repsol SA said it would pay a higher dividend than planned.

Shell’s third-quarter adjusted net income was $9.45 billion, just below analysts’ average estimate of $9.69 billion, according to released data. This figure is below the record of $11.47 billion, which was in the second quarter when oil prices were over $100 per barrel.

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The largest decline was observed in integrated gas and chemistry. The company has already said that the contribution from gas trading will be lower, but the division’s adjusted profit fell 38% compared to the second quarter, twice the decline of the company as a whole.

The business is led by Wael Sawan, who will become Shell’s CEO in early 2023 when Van Beurden steps down.

In Shell’s chemicals and products division, which produces raw materials for other industries and is considered the leader of the economy as a whole, adjusted earnings fell 62% compared to the second quarter. Plant utilization has fallen to 76% as the company has adjusted to lower margins and could fall to 72% in the fourth quarter.

Gearing, Shell’s net debt-to-equity ratio, rose to 20.3%, down from a year earlier but up from 19.3% in the second quarter.