Shell will hand its investors almost £20billion this year in a share buyback and dividend bonanza despite a slump in third-quarter profits.
The gas and oil giant yesterday said it will buy back another £2.9billion of shares over the next three months as well as pay a 27p dividend for the third quarter.
That brings the total payouts planned for this year so far to a total of £19billion.
The bumper payday for shareholders sparked a backlash from unions who accused the firm of profiteering from high consumer energy bills.
Shell reported profits of £5.1billion in the three months to the end of September, which was down by 34 per cent from £7.8billion in the same period last year when oil and gas prices soared due to Russia’s invasion of Ukraine.
Wael Sawan: The new Shell boss has slowed its shift towards green energy
However, the latest figure was a step up from the previous quarter’s £4.2billion.
And it was better than the 60 per cent slump in quarterly profits to £2.7billion reported by arch-rival BP this week.
‘Shell continues to put further daylight between itself and its UK rival BP,’ said Michael Hewson, the chief market analyst at CMC Markets.
Shell chief executive Wael Sawan has slowed its shift to green energy since he took the helm at the beginning of the year, prioritising profit and shareholder returns.
Yesterday’s figures showed the strategy is paying off as the oil and gas unit posted £3.85billion profit while its renewables division fell to a loss of £54.8million.
Sawan said: ‘Shell delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets.
‘We continue to simplify our portfolio while delivering more value with less emissions.’
Sawan has focused on boosting Shell’s share price in the belief that it is undervalued compared to US competitors such as Exxon Mobil and Chevron.
Russ Mould, investment director at AJ Bell, said: ‘Wael Sawan is certainly feeling confident enough to dole out generous returns to shareholders with another big share buyback.
‘Investors in oil and gas stocks on this side of the Atlantic have felt short-changed relative to holders of the big US oil firms which have ignored the clamour to go green and been rewarded by the market for doing so.
‘That informs the shift under Sawan since he took over.
‘Investments will still be made in the energy transition but they will have to stack up in terms of returns.’
Shell revealed it will reduce capital expenditure to fund further shareholder payouts.
Jamie Maddock, energy research analyst at Quilter Cheviot, said: ‘Looking to the future, Shell seems to be keeping a tight rein on project spending, despite fluctuating oil prices.
‘This conservative spending means more cash in hand, which could be used to increase dividends and fund more share buybacks.’
The payout sparked outrage from unions who said Shell and its investors are cashing in ‘at the expense of struggling families’.
TUC general secretary Paul Nowak said: ‘This sums up everything that is wrong with our broken energy market. Money that should have gone to cutting household bills has ended up in shareholder pockets.’
