Shell has revealed that profits slid over the first half of the year after a drop in trading profits and lower oil and gas prices hit the energy giant's performance. The oil major told shareholders that adjusted earnings dropped by 30% to $9.84 billion (£7.4 billion) over the half-year, compared with the same period last year.
Nevertheless, profits in the second quarter were ahead of analyst expectations. Shell added that income attributable to shareholders was 23% lower, due to the effect of lower trading and optimisation margins and decreasing energy prices.
UK energy levy adds pressure
The firm said it was also impacted by a charge of $509 million (£383 million) related to the UK energy profits levy. This windfall tax on oil and gas companies operating in British waters added further pressure to Shell's bottom line during the period.
Wael Sawan, chief executive of Shell, said the company generated "robust cash flows reflecting strong operational performance in a less favourable macro environment". He emphasised Shell's continued strategic progress despite the challenging market conditions.
Strategic milestones achieved
Shell continued to deliver on its strategy by enhancing its deep-water portfolio in Nigeria and Brazil during the period. The company also achieved a key milestone by shipping the first cargo from LNG Canada, marking significant progress in its liquified natural gas operations.
The energy giant's continued focus on performance, discipline and simplification helped deliver $3.9 billion (£2.9 billion) of structural cost reductions since 2022. The majority of these savings were delivered through non-portfolio actions rather than asset sales.
Shareholder returns maintained
This operational focus enables Shell to commence another $3.5 billion (£2.6 billion) of buybacks for the next three months. The announcement marks the 15th consecutive quarter of at least $3 billion in buybacks, demonstrating the company's commitment to returning cash to shareholders despite the profit decline.
(PA/London) Note: This article has been edited with the help of Artificial Intelligence.
