Shell reported a second-quarter profit of $6.3 billion, marking a 19% decline from the previous quarter. Despite the drop, the profit exceeded analysts’ forecasts and was nearly 25% higher than the same period last year.
The decrease was attributed to weaker refining margins and oil and gas trading, although strong performances in oil and gas production and retail marketing helped offset some losses.
The company’s second-quarter adjusted earnings, its measure of net profit, were $6.3 billion, surpassing analysts’ expectations of $6 billion.
Under CEO Wael Sawan, who took office in January 2023, Shell has shifted its strategy towards higher-margin businesses, primarily focusing on oil and gas.
The company has scaled back its renewables and hydrogen operations, exited European and Chinese power markets, and sold refineries.
In the second quarter, Shell secured several liquefied natural gas (LNG) deals, reinforcing its commitment to meeting the rising demand for the fuel.
The company also invested in new hydrogen and carbon capture projects, highlighting its continued engagement with the energy transition.
Shell achieved cost reductions of $700 million in the first half of 2024, contributing to a total of $1.7 billion in cuts since 2022. This is part of a broader savings target of $2 billion to $3 billion by 2025.
Shell has maintained its dividend at 34 cents per share but announced a further $3.5 billion share buyback over the next three months.
The fall in quarterly earnings was also influenced by lower prices and sales volumes, weaker trading in Shell’s LNG division, and lower LNG volumes due to plant maintenance.
The company reported impairments totaling $1.49 billion, including $708 million from the sale of its Singapore refinery and $783 million from pausing the construction of a large biofuel plant in Europe due to weak market conditions.
Shell expects lower oil, gas, and LNG production in the third quarter due to a heavy maintenance schedule.
