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Shell’s profits continue to grow amid wider energy crisis

Shell's Q2 results beat its previous record highs, set just in Q1. Image: Kent Smith/Shell.

Shell's Q2 results beat its previous record highs, set just in Q1. Image: Kent Smith/Shell.

Shell has reported record profits in Q2 2022, as its adjusted earnings hit £9.6 billion ($11.5 billion), up from its previous high of £7.6 billion ($9.1 billion) in Q1.

Meanwhile the company’s EBITDA grew to $23.1 billion in Q2 2022 from $19.0 billion in Q1 2022.

The oil and gas giant has announced $6 billion of share buybacks, which will be completed by Q3 2022. Over the last four quarters, total distributions have been “significantly in excess of 30%” of Cash Flow From Operations (CFFO) the company noted, and are expected to remain at this level.

Disciplined cash capex is now expected to be in the $23-27 billion range in 2022.

Shareholder distributions have doubled in the first half of 2022, when compared to a decade ago when Brent prices were at a similar point, it noted.

Shell’s bumper results follow former chancellor Rishi Sunak announcing a windfall tax of 25% on oil and gas companies in the UK in May, as the reality of the UK energy crisis became clearer.

Since then, continued volatility in the energy market – driven by uncertainty around gas supplies following Russia’s invasion of Ukraine – have led to price cap predictions for the winter period continuing to grow.

"With volatile energy markets and the ongoing need for action to tackle climate change, 2022 continues to present huge challenges for consumers, governments, and companies alike,” Shell plc chief executive officer, Ben van Beurden said.

“Consequently, we are using our financial strength to invest in secure energy supplies which the world needs today, taking real, bold steps to cut carbon emissions, and transforming our company for a low-carbon energy future.”

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