Shell 2Q Net Profit Fell QoQ, Launches $2 Billion Buyback -- Update

By Jaime Llinares Taboada

Royal Dutch Shell PLC on Thursday reported that its net profit fell in the second quarter from the prior period, and launched a $2.0 billion buyback.

The Anglo-Dutch energy company made a net profit of $3.43 billion for the three months to June, down from $5.66 billion in the first quarter. The group booked impairments of $1.8 billion and charges of $1.2 billion due to the fair value accounting of commodity derivatives.

However, adjusted earnings on a current cost of supply basis rose to $5.53 billion from $3.23 billion, beating a market consensus of $5.07 billion--taken from Vara Research and based on 21 analysts' estimates. The quarter-on-quarter increase reflected higher oil prices, one-off favorable tax impacts, higher marketing margins and lower operating expenses, the company said.

In addition, Shell said it will pay a dividend of 0.24 cents a share for the period, and launched a $2.0 billion share buyback, which is targeted to be completed by the end of 2021. This is part of Shell's commitment to increase shareholder distributions to 20%-30% of cash flow from operations, it said.

As for the third quarter of the year, Shell said that due to the impact of maintenance activities, integrated gas production will average 870,000-920,000 oil-equivalent barrels per day, with LNG liquefaction volumes totaling 7.4 million-8.0 million metric tons over the three months. Upstream production is forecast at 2.10 million-2.25 million oil-equivalent barrels per day.

Refinery utilization is seen at 73%-81%, and sales volumes of oil products are projected at between 4.3 million and 5.3 million barrels per day.

As for chemicals, plant utilization is expected at 77%-85%, with sales volumes of 3.6 million-3.9 million tons.

Shares at 0703 were up 2.7% at 1,443.2 pence.

Write to Jaime Llinares Taboada at [e-mail]; @JaimeLlinaresT

(END) Dow Jones Newswires

July 29, 2021 03:20 ET (07:20 GMT)

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