Shell Misses On Q2 Earnings, Announces $3B Share Buyback Program

Shell PLC SHEL reported Q2 2023 revenues of $74.6 billion missing the consensus of $79.2 billion. 

Adjusted EBITDA declined 37% Y/Y to $14.4 billion on a reduction in oil and gas prices, refining margins, volume decline, and lower LNG trading & optimization results.

Adjusted earnings per ADS of $1.50 missed the consensus of $1.61. 

Adjusted earnings declined to $5.1 billion from $11.5 billion a year ago.

Adjusted earnings declined in Integrated Gas by 49% Y/Y to $2.5 billion, Upstream by 40% YY to $1.7 billion, Chemical & Products by 75% Y/Y to $450 million, and Renewables and Energy by 41% Y/Y to $228 million. 

On the other hand, Marketing adjusted earnings rose by 2% Y/Y to $894 million in the quarter.

Total production at Integrated Gas rose 2% Y/Y to 985 kboe/d and Upststream fell by 9% Y/Y to 1,701 kboe/d.

Meanwhile, sales volumes at Marketing rose 7% Y/Y to 2,607 thousand b/d, and at Chemical & Products declined to 2.8 thousand tonnes from 3.1 thousand tonnes. 

Related: Shell Revises Q2 Operational Outlook 

Cash capital expenditure stood at $5.1 billion vs. $7.0 billion a year ago. Cash flow from operating activities stood at $15.1 billion in the quarter.

As of Q2-end, net debt stood at $40.3 billion, with a gearing ratio of 17.3%.

Repurchase: SHEL announced a $3 billion share repurchase program, scheduled for November 2, 2023, expected to be completed by Q3 2023 results. 

Subject to Board approval, a share buyback program of at least $2.5 billion is expected to be announced at the third quarter 2023 results announcement.

Dividend: Shell disclosed a Q2 interim dividend of $0.331, up 15%, payable on September 18, 2023, to shareholders of record as on August 11, 2023.

Outlook: The company revised its outlook for 2023 cash capital expenditure to $23 billion - $26 billion from $23 billion - $27 billion.

It expects Q3 production at Integrated Gas to be approximately 870 - 930 thousand boe/d and Upstream to be approximately 1,600 - 1,800 thousand boe/d.

The company projects Q3 Marketing sales volumes to be approximately 2,450 - 2,950 thousand b/d. 

Also Read: Shell Plans To Sell Stake In Indonesia's Masela Block For Around $650M

Price Action: SHEL shares are trading lower by 0.30% Y/Y at $62.432 premarket on the last check Thursday.