Energy giant Shell reported a rise in its adjusted earnings in the third quarter, while its LNG sales also rose when compared to the same period last year.
The firm said its adjusted earnings reached $9.45 billion in the quarter, a jump when compared to $4.13 billion in the year before. Adjusted earnings dropped from record $11.47 billion in the prior quarter.
Income attributable to Shell shareholders was $6.74 billion, compared with a loss of $447 million last year, and included net losses of $1 billion due to the fair value accounting of commodity derivatives, and impairment charges of $0.4 billion, Shell said.
Shell said that the company’s income dropped compared to $18.04 billion in the prior quarter mainly due to lower LNG trading and optimization results, lower chemicals and refining margins, as well as higher underlying operating expenses.
Cash flow from operating activities for the third quarter 2022 was $12.5 billion, and included working capital outflows of $4.2 billion, and tax payments of $3.4 billion.
“We are delivering robust results at a time of ongoing volatility in global energy markets. We continue to strengthen Shell’s portfolio through disciplined investment and transform the company for a low-carbon future,” Shell’s CEO Ben van Beurden said.
“Today we are announcing a new share buyback programme resulting in an additional $4 billion of distributions, which we expect to complete by our Q4 2022 results announcement,” he said.
“Furthermore, we plan to increase the dividend per share (DPS) for the fourth quarter, which will be paid in March 2023, by an expected 15 percent, subject to Board approval,” van Beurden said.
LNG sales rise
Shell sold 15.66 million tonnes of LNG in the July-September period, a rise of 3 percent compared to 15.18 million tonnes in the same period last year. Sales also rose compared to 15.21 million tonnes in the prior quarter.
Liquefaction volumes dropped 5 percent year-on-year from to 7.24 million tonnes. These volumes also dropped compared to 7.66 million tonnes in the prior quarter.
Shell said liquefaction volumes decreased by 5 percent mainly due to “Permitted Industrial Actions” at Prelude and higher maintenance activities.
During the January-September period, Shell sold 49.16 million tonnes of LNG, a rise of 4 percent year-on-year, while liquefaction volumes dropped 1 percent to 22.90 million tonnes.
Shell expects liquefaction volumes to be about 7-7.6 million tonnes in the fourth quarter.
Also, the company’s Integrated Gas segment earned $5.73 billion in the third quarter, compared to a loss of $131 million in the same period a year ago and $8.10 billion in the prior quarter.
Adjusted earnings reached $2.31 billion, down from the previous quarter of $3.75 billion and up from $1.83 billion in the same period last year.
Compared with the second quarter, Shell said earnings reflected the net effect of lower contributions from trading and optimization and higher realized prices.
The trading and optimization contributions were mainly impacted by a “combination of seasonality and supply constraints, coupled with substantial differences between paper and physical realizations in a volatile and dislocated market,” Shell said.
The LNG giant previously said it expected “significantly lower” trading and optimization results for its integrated gas business in the third quarter.