Shell Maintains $3.5 Billion Share Buyback Despite Dip In Profits

Shell logo at energy event ADIPEC 2024 in Abu Dhabi, UAE

Gaurav Sharma, November 2024

Oil and gas major Shell (LON: SHEL) has maintained the pace of its $3 billion-plus share buybacks despite its quarterly profits falling by a third.

With energy prices dipping over the course of the second quarter, the FTSE 100 company said on Thursday that its adjusted earnings, or net profit, fell 32% to $4.3 billion over the three months to June 30.

Shell reported adjusted earnings of $6.29 billion over the same period last year and $5.58 billion in the first three months of 2025.

Over the course of the second quarter, global proxy benchmark Brent crude averaged around $67 a barrel during versus $75 a barrel in the first quarter, and above $80 in the corresponding quarter a year ago.

Nonetheless, Shell’s quarterly profits still comfortably beat market expectations in the range of $3.7 billion to $3.9 billion. The energy major also said it had achieved company-wide cost reductions of $800 million through the first six months of 2025, bringing cumulative reductions since 2022 to $3.9 billion.

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Earlier in the year, Shell revealed a cost reduction target of $5 billion to $7 billion by the end of 2028. Its net debt came in at $43.2 billion for the second quarter, up from $41.5 billion on a quarterly basis.

Elsewhere, the company also reported cash flow from operating activities of $11.9 billion, down from $13.5 billion a year ago.

Progress And Buybacks

The progress enabled Shell to announce another $3.5 billion in share buybacks over the next three months. The move maintains the pace of its shareholder returns, with it being the 15th consecutive quarter of at least $3 billion in buybacks.

In response to the company’s latest quarterly results, Wael Sawan, CEO of Shell, said: “We generated robust cash flows reflecting strong operational performance in a less favourable macro environment. We continued to deliver on our strategy by enhancing our deep-water portfolio in Nigeria and Brazil, and achieved a key milestone by shipping the first cargo from LNG Canada.

“Our continued focus on performance, discipline and simplification helped deliver $3.9 billion of structural cost reductions since 2022, with the majority delivered through non-portfolio actions.”

Sawan added that such a sharp focus is what has “enabled” and continues to enable improved shareholder returns.

No Bid For BP

Earlier in the summer, Shell denied it was lining up a bid for beleaguered U.K. rival BP (LON: BP) to achieve an even bigger scale. It is a rumor that has persisted for a good few years.

But in a statement in June, the company said: “In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with BP with regards to a possible offer.”

Following the publication of its quarterly results, Sawan reiterated the line in an interview with CNBC, and denied there was any interest from his company for a bid for BP.

“I don’t buy bigger is better. I think you have to drive it from a value perspective,” Sawan told the business network.

“Shell is outperforming because we have been able to just stick to our own story, and just deliver on what we say we’re going to do.”