Shell's profits drop by almost a quarter but still easily exceed expectations

Shell's adjusted earnings for the second quarter, which is its definition of net profits, fell by almost a third Thursday. The drop in oil prices was to blame, but analysts still beat their forecasts.

The oil giant said that it will maintain its pace of share buybacks at $3.5 billion for the next three-month period, marking the 15th consecutive quarter with at least $3 billion.

Shell, on the other hand, has achieved a $3.9 billion cost reduction compared to 2022. This is part of a programme of cost cutting aimed at saving $5 billion to $7 billion by 2028.

Cash flow from operations was $11.9 billion, down from $13.5 bn a year earlier.

With $2.1 billion in dividends paid, shareholder distributions now equal 46% of operating cashflow. This is within the 40% to 50% range.

Shell's adjusted earnings in the second quarter reached $4.264 Billion, a staggering amount compared to the average of $3.74 Billion in an industry survey conducted by the company. However, the results were down 32% compared to a year earlier.

Brent crude oil prices were $67 per barrel on average during the quarter of April to June, down from $75 in the first three months and $85 one year ago.

The price of crude oil fell during the first quarter of the year as OPEC+ - the Organization of Petroleum Exporting Countries plus allies like Russia - lowered production.

began unwinding

Self-imposed production reductions aimed at supporting market.

most recent decision

The plan calls for a 548,000 barrels a day increase in oil production.

Shell was a leader in the trading of a commodity

Updated on September 29, 2009

It said that the company expected to see a decline in earnings due to a weaker trading environment for its integrated gas division, and also losses from its chemical and product operations following an outage of its U.S. Monaca Polymer Plant.

(source: Reuters)