Shell drops down to $5 billion as energy prices reduce

Shell’s profit margin saw a 56% drop down to $5 billion due to the decreasing oil and gas price as well as refining profit margins.  

Due to declining oil and gas prices and refining profit margins, Shell (SHEL.L) reported a 56% drop in second-quarter profit to $5 billion on Thursday. As a result, the energy giant had to slow its share repurchase program.

The earnings fell short of expectations but were in line with the company's second-quarter performance two years ago. They come after record earnings in 2022 as a result of soaring energy costs following Russia's invasion of Ukraine.

In addition to increasing its dividend to $0.33 per share, as it had previously announced in June, Shell announced that it would repurchase $3 billion worth of shares over the following three months, down from the $3.6 billion it had spent over the previous three.

Shell declared in June that it would repurchase shares in the second half of the year for at least $5 billion. It announced on Thursday that at least $2.5 billion in buybacks would be disclosed along with its third-quarter results.

Shell's adjusted earnings of $5.073 billion fell short of the $5.8 billion analyst consensus provided by the company.

The outcomes were measured against quarterly earnings records of $11.5 billion from the previous year and $9.65 billion from the first quarter of 2023.

In June, Sawan outlined strategies for increasing shareholder returns and enhancing performance, including steady oil production, increased natural gas production, and a reduction in investments in lower-yielding renewable energy sources.

Shell shares had decreased 1.7% by 0730 GMT, compared to a 1% decline for the bigger European energy index.