27 July 2023
If you are covering Shell plc second quarter 2023 results, please see the following comment from Jamie Maddock, equity research analyst at Quilter Cheviot:
“In its latest quarterly report, Shell disappointed by missing consensus profit expectations by around 10%, reporting sharply lower year-on-year performance due to weak oil and gas prices plus refined product margins. While the energy crisis resulted in elevated plus volatile prices that had previously boosted Shell’s results across a couple of divisions, this was no longer the case for Q2’23.
“Analysts had previously called for an increase in dividends and Shell has delivered by raising its dividend by 15%, as previously indicated at its capital markets day. The company remains committed to using its bumper profits over the past 18 months to fund a repurchasing scheme. Its stock buyback programme of at least $5.5bn is better than previously indicated, but only modestly so. The high end of the company's capital expenditure guidance has also been trimmed.
“The lower spend and modest boost to H2’23 share buybacks offset a bit of a weak financial quarter.
“Chief executive Wael Sawan is still relatively new in post having taken the job in January. He had pledged to focus on closing the gap in performance compared to US competitors, but that remains to be seen as the firm faces headwinds as oil and gas prices tail-off but he is off to a good start by refocusing the business on improving capital allocation discipline.”
