Shell reports net profit of $5.5 billion and raises dividend

Anglo-Dutch Shell reported net profit of $5.5 billion for the second quarter of the year on the back of stronger oil prices and said it will buy back $2 billion in shares.

The company also posted free cash flow of $9.7 billion for the period, up from $200 million a year earlier, and reduced its net debt to $65.7 billion from $77.8 billion for the second quarter of 2020.

“Today we are ramping up our shareholder returns, increasing dividends and starting share buybacks while continuing to invest in the future of energy,” said CEO Ben van Beurden. “The quality of Shell’s operational and financial delivery and the strengthened balance sheet have given the Board of Directors confidence to reduce the dividend per share to 24 cents from the second quarter of 2021.”

While Shell improved its performance thanks to higher oil prices, Shell also recently became the target of a lawsuit to cut its oil and gas production. In an unprecedented ruling, the Dutch judge ordered the company to cut its emissions sharply, which it can only realistically do by reducing its oil and gas production.

Shell is appealing the ruling.

Meanwhile, the company stimulate its presence in the renewable energy space, most recently with the acquisition of green energy retailer Inspire Energy Capital in the United States. The Anglo-Dutch supermajor said earlier this year it will increase spending on renewable energy and low-carbon technologies to a quarter of its total budget by 2025.

At the same time, it remains committed to its core business. Earlier this month, the company said it had made the final investment decision in the Whale deepwater oil field in the Gulf of Mexico. This will be Shell’s second deepwater project in the Gulf of Mexico, but it expects an internal rate of return of more than 25 percent, thanks to technological advances that have reduced production costs.

By Irina Slav for

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