𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Shell has revealed that profits slid over the first half after a drop in trading profits and lower oil and gas prices.

The oil major told shareholders that adjusted earnings, or net profits, dropped by 30% to 9.84 billion US dollars (£7.4 billion) over the half-year, compared with a year earlier.

Nevertheless, profits in the second quarter of the year were ahead of analyst expectations.

Shell added that income attributable to shareholders was 23% lower, due to the effect of “lower trading and optimisation margin” and decreasing energy prices.

The firm said it was also impacted by a charge of 509 million dollars (£383 million) related to the UK energy profits levy, which took place in the first quarter.

The FTSE 100 company, however, said it would continue to hand significant cash back to its shareholders.

It announced a 3.5 billion dollar (£2.6 billion) share buyback for the quarter.

Wael Sawan, chief executive of Shell, said: “Shell 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 (liquified natural gas) Canada.

“Our continued focus on performance, discipline and simplification helped deliver 3.9 billion dollars (£2.9 billion) of structural cost reductions since 2022, with the majority delivered through non-portfolio actions.

“This focus enables us to commence another 3.5 billion dollars (£2.6 billion) of buybacks for the next three months, the 15th consecutive quarter of at least 3 billion dollars in buybacks.”

Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Shell’s second earnings hit a bit of an oil patch, with lower commodity prices, a weaker trading environment and unplanned downtime at its chemical plants all playing their part.

“Shell’s balance sheet is one of its key strengths and investors could start to get nervous if debt continues to rise for any length of time.

“Nonetheless, management has ploughed on with a further buyback […] and there are some signs that financial performance could improve in the third quarter.”

Shares in the company moved 1.7% higher in early trading.