Shell increases dividend, launches buyback programme as earnings surge

Royal Dutch Shell said on Thursday that it had raised its dividend and launched a $2 billion share buyback programme, as it reported the highest quarterly profit in over two years, supported by a sharp increase in oil and gas prices.

Total earnings that exclude special items, increased to $5.53 billion during the second quarter, or to their highest level since the last quarter of 2018, compared with a profit of $638 million in the same period a year ago. A consensus of analyst estimates had pointed to earnings of $5.07 billion.

However, the company’s fuel sales remained well below pre-pandemic levels at 4.5 million barrels per day during the second quarter, up from 4.16 million barrels per day in the previous quarter.

Shell raised its dividend for a second straight quarter, by 38% to $0.24, one year after its first dividend cut since the 1940s, as energy demand dropped due to the COVID-19 crisis.

The company also launched a $2 billion share buyback programme, which is expected to be completed by the end of this year.

“We are stepping up our shareholder distributions today, increasing dividends and starting share buybacks, while we continue to invest for the future of energy,” Shell’s Chief Executive Officer Ben van Beurden said in a statement, cited by Reuters.

Earlier in July, Shell said that it intended to increase its distribution to shareholders via share buybacks or dividends to 20%-30% of cash flow from operations, starting in Q2.