Oil giant Royal Dutch Shell posted a 30 percent increase in net profit in the second quarter of 2018 and announced a $25 billion share buyback program.
Net income attributable to shareholders on a current cost of supplies (CCS) basis, used as a proxy for net profit, and excluding identified items, came in at $4.69 billion, up from $3.6 billion seen in the same quarter a year ago.
The earnings fell short of an analyst consensus of $5.967 billion, however, Reuters reported.
The company said the earnings “reflected increased contributions from Integrated Gas and Upstream, partly offset by lower earnings in Downstream.”
“Upstream” refers to the exploration and production sector of the oil industry, whereas “downstream” relates mainly to the refining process.
Shell also announced that it would start a share buyback program “of at least $25 billion in the period 2018-2020, subject to further progress with debt reduction and oil price conditions.”
Here are the key second-quarter metrics:
• Net income attributable to shareholders (on a current cost of supplies basis and excluding identified items) came in at $4.69 billion, versus $5.4 billion in the previous quarter.
• The Anglo-Dutch oil company maintained its quarterly dividend at 47 cents.
• Of the 2016-2018 $30 billion divestment program, $27 billion is complete with more than $7 billion announced or in advanced progress, the company said.
Shell Chief Executive Officer Ben van Beurden said that the share buyback program was “another important step towards the delivery of our world-class investment case.”
“This move complements the progress we have made since the completion of the BG acquisition in 2016, to reshape our portfolio through a $30 billion divestment program and new projects, to reduce net debt, and to turn off the scrip dividend.”
