Energy giant Shell has reported a rise in adjusted earnings in the second quarter while its LNG sales dropped when compared to the same period last year.
The Hague-based firm said its adjusted earnings reached $5.53 billion in the quarter, the company’s highest in over two years, boosted by a rise in oil and gas prices. This compares to $638 billion the year before, and $3.2 billion in the prior quarter.
Income attributable to Shell shareholders reached $3.42 billion and included posttax impairment charges of $1.8 billion and charges of $1.2 billion due to the fair value accounting of commodity derivatives, Shell said.
This compares to a loss of $18.1 billion in the same quarter last year and $5.7 billion in the prior quarter.
“We are stepping up our shareholder distributions today, increasing dividends and starting share buybacks, while we continue to invest for the future of energy,” chief executive Ben van Beurden, said.
“The quality of Shell’s operational and financial delivery and strengthened balance sheet have given the board confidence to rebase the dividend per share from Q2 2021 onwards to 24 US cents. We are also launching $2 billion of share buybacks, which is targeted to be completed by the end of this year,” van Beurden said.
Shell expects total shareholder distributions for 2021 to be around the middle of the 20-30% range of CFFO from the previous four quarters.
LNG volumes and sales down
Shell sold 15.92 million tonnes of LNG in the April-June period, compared to 17.38 million tonnes in the same period last year, and 16.38 million tonnes in the prior quarter.
Liquefaction volumes also dropped year-on-year from 8.36 million tonnes to 7.49 million tonnes but also compared to the previous quarter of 8.16 million tonnes. Shell said the volumes dropped due to higher maintenance activities and feedgas constraints.
Shell expects liquefaction volumes to be about 7.4 – 8.0 million tonnes in the third quarter.
Shell’s Integrated Gas segment earned $422 million, compared to a loss of $7.59 billion in the same period a year ago and a $2.52 billion in the prior quarter.
Adjusted earnings reached $1.60 billion, rising 14 percent from the previous quarter but also from $316 million in the same period last year.
Compared with the prior quarter, Integrated Gas adjusted earnings primarily reflected higher realised prices for LNG, oil and gas, lower comparative operating expenses due to credit provisions in the first quarter, and favourable deferred tax movements, Shell said.