Shell plc second quarter 2022 results
Shell plc released its second quarter results and second quarter interim dividend announcement for 2022.
Shell plc Chief Executive Officer, Ben van Beurden
“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. 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.
And, crucially, our Powering Progress strategy is delivering strong results for our shareholders on the back of years of portfolio high grading, combined with robust operational performance. We are increasing shareholder distributions through a $6 billion share buyback programme which is expected to be completed by Q3 2022 results.”
DISCIPLINE DELIVERING RESULTS: MORE CASH, MORE RESILIENCE
▪ Strong performance in a turbulent economic environment with Adjusted Earnings of $11.5 billion in Q2 2022. Adjusted EBITDA of $23.1 billion in Q2 2022 versus $19.0 billion in Q1 2022.
▪ Announced $6 billion share buybacks are expected to be completed by Q3 2022 results; total distributions significantly in excess of 30% of CFFO for the last four quarters. With the current energy sector outlook and subject to Board approval, shareholder distributions are expected to remain in excess of 30% of CFFO.
▪ In the first half of 2022 shareholder distributions have doubled from those in the first half of 2013, a decade ago, when Brent prices were similar, with increased discipline, integrated value delivery and improved resilience driving better results.
▪ Strengthening energy security through natural gas investments in Pierce and Jackdaw (UK), participation in the North Field LNG expansion (Qatar) and Crux FID (Australia). Positioning for the future of energy with a final investment decision for Holland Hydrogen I (Netherlands) and progressing the completion of the acquisition of Sprng Energy (India).
▪ Disciplined cash capex: expected to be in the $23 – 27 billion range in 2022.
Total shareholder distributions in the quarter amounted to $7.4 billion. The $8.5 billion share buyback programme for the first half of 2022 was completed on July 5, 2022. Dividends declared to Shell plc shareholders for the second quarter 2022 amount to $0.25 per share. Today, Shell announces a share buyback programme of $6 billion which is expected to be completed by the third quarter 2022 results announcement. With the current energy sector outlook and subject to Board approval, shareholder distributions are expected to remain in excess of 30% of cash flow from operating activities.
Half Year Analysis
Income attributable to Shell plc shareholders, compared with the first half 2021, mainly reflected higher realised prices, higher refining margins, higher trading and optimisation results, partly offset by lower volumes, and lower Chemicals margins.
First half 2022 income attributable to Shell plc shareholders included post-tax net impairment reversals of $1.7 billion and provisions for onerous contracts of $0.5 billion. These are included in identified items amounting to $1.1 billion in the half year.
Adjusted Earnings and Adjusted EBITDA for the first half 2022 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for identified items of positive $1.1 billion and the cost of supplies adjustment of $3.5 billion.
Cash flow from operating activities for the first half 2022 was $33.5 billion, and reflected working capital outflow of $11.7 billion, and tax payments of $5.3 billion.
Cash flow from investing activities for the first half 2022 was an outflow of $10.5 billion.
SECOND QUARTER 2022 PORTFOLIO DEVELOPMENTS
Withdrawal from Russian oil and gas activities
We refer to Note 9 to the Condensed Consolidated Interim Financial Statements.
In May 2022, we announced that Shell Australia Pty Ltd and its joint venture partner, SGH Energy, have taken a final
investment decision to approve the development of the Crux natural gas field, off the coast of Western Australia.
In July 2022, we were selected by QatarEnergy as a partner in the North Field expansion project in Qatar.
In April 2022, we announced that we have signed the production-sharing contract (PSC) to formally acquire a 25% stake
in the Atapu Field in Brazil.
In May 2022, we announced the start of production of the FPSO Guanabara in the Mero field, in the offshore Santos
Basin in Brazil.
In July 2022, we announced the final investment decision to develop the Jackdaw gas field in the UK North Sea, following
regulatory approval earlier this year.
In May 2022, we completed the sale of Shell Neft LLC, Shell’s retail stations and lubricants business in Russia, to PJSC
In June 2022, we completed the acquisition of certain company-owned fuel and convenience retail sites from the
Landmark group of companies in the USA, including supply agreements for the independently operated fuel and
Chemicals and Products
In July 2022, we announced that Shell USA, Inc. and Shell Midstream Partners, L.P. had executed a definitive agreement
and plan of merger, pursuant to which Shell USA, Inc. will acquire all of the common units representing limited partner
interests in Shell Midstream Partners, L.P. held by the public.
Renewables and Energy Solutions
In April 2022, we signed an agreement with Actis Solenergi Limited to acquire 100% of Solenergi Power Private Limited
and with it, the Sprng Energy group of companies in India.
In July 2022, we announced the final investment decision to build Holland Hydrogen I, which will be Europe’s largest
renewable hydrogen plant once operational in 2025.
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