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Oil giant Shell reveals plans to increase its dividend when it reports profits for the third quarter

The logo of Shell on an oil storage silo, beyond rail tank cars at the company’s Pernis refinery in Rotterdam, the Netherlands, Sunday, October 23, 2022.

Bloomberg | Bloomberg | Getty Images

British oil major Shell reported a third-quarter profit on Thursday, but lower refining and trading revenue put an end to the record quarterly revenue.

Shell posted adjusted earnings of $9.45 billion for the three months to the end of September, meeting analysts’ expectations of $9.5 billion, according to Refinitiv. The company had adjusted earnings of 4.1 dollars billion over the same period the previous year and achieved a whopping 11.5 billion dollars for the second quarter of 2022.

The oil giant said it planned to increase its dividend per share by about 15% for the fourth quarter of 2022, which will be paid out in March 2023. It also announced a new buyback program, which is set to result in an additional $4 billion in distributions and is expected to be completed by next results release.

Shares in Shell are up over 41% so far this year.

The London-headquartered oil major reported consecutive quarters of record profits through the first six months of the year, benefiting from rising commodity prices following Russia’s invasion of Ukraine.

However, Shell warned in an update earlier this month that lower refining and chemicals margins and weaker gas trading were likely to negatively impact third-quarter results.

On Thursday, the company said that an improvement in global product supply had contributed to lower refining margins in the third quarter, and that revenues from gas trading had also fallen.

“Trading and optimization contributions were mainly impacted by a combination of seasonality and supply constraints, combined with significant differences between paper and physical realizations in a volatile and dislocated market,” Shell said in a earnings release.

Change in leadership

The group’s results come shortly after it was announced that CEO Ben van Beurden will step down at the end of the year after almost a decade at the helm.

Wael Sawan, currently Shell’s director of integrated gas, renewables and energy solutions, will become the next CEO on 1 January.

Sawan is a dual Lebanese-Canadian citizen and has held roles in downstream retail and various commercial projects during his 25-year career at Shell.

“I look forward to channeling the pioneering spirit and passion of our incredible people to address the enormous challenges and seize the opportunities presented by the energy transition,” Sawan said in a statement on September 15, adding that it was an honor to follow van Beurden’s management.

“We will be disciplined and value-focused as we work with our customers and partners to deliver the reliable, affordable and cleaner energy the world needs.”

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