Shell Reports Huge First Quarter Profit of Nearly £1.4 Billion More than Expected
Posted 04/05/2023 11:29
Shell has made nearly $1.7 billion (£1.4 billion) more in profit than experts had expected in the first three months of the year, the oil giant reported on Thursday.
The company recorded a 5.7% rise in adjusted earnings - more than $9.6 billion (£7.6 billion) - between January and March. Business analysts had expected the firm to perform worse than it did.
Compared with the same quarter in 2022, the company made $9.1 billion (£7.2 billion).
Shell said it had faced unfavourable tax movements at the start of 2023, adding the price it was able to sell oil and gas at had dropped.
BP announces profits of more than £500m higher than expected
However, the firm said that it had managed to offset some of this through cutting operating expenses and a rise in its chemicals and products trading business.
According to Shell, it had decreased production slightly compared to a year ago, to 2.9 million barrels of oil equivalent per day.
Shell also announced plans to buy back shares worth £4 billion (£3.2 billion) from investors over the next three months to return cash to its owners.
On completion, the company will have distributed around $12 billion (£9.6 billion) to its shareholders in the first six months of 2023.
Chief executive Wael Sawan said: "In Q1 Shell delivered strong results and robust operational performance, against a backdrop of ongoing volatility, while continuing to deliver vital supplies of secure energy.
"We will commence a 4 billion dollar share buyback programme for the next three months as part of our commitment to deliver attractive shareholder returns."
Like its rival BP, Shell's results immediately sparked calls for the government to take a tougher stance against the oil giants.
Labour and Liberal Democrats criticised the announcement, while TUC general secretary Paul Nowak said the government needed to "end the energy racket".
He added: "These sky-high profits beg the question - will the government ever have the backbone to tax the energy giants properly?"
Alexander Kirk, a campaigner at Global Witness, said: "Despite the glaringly obvious inequality at the heart of our energy system, the government appears to be making the same mistakes all over again.
"The simple truth is that the windfall tax has not worked and new evidence has shown that through loopholes in the UK's tax regime, UK taxpayers are handing oil and gas companies billions extra in tax rebates."