Shell’s second-quarter adjusted earnings down 50% from first-quarter 2023

Shell plc had adjusted earnings of $5.1 billion for second-quarter 2023, down from adjusted earnings of $9.65 billion in first-quarter 2023 and $11.5 billion for the previous year’s second quarter.

The decrease compared with the previous quarter was attributable to lower oil and gas prices and refining margins, lower volumes and lower LNG trading and optimization results, Shell said.

The profit decline in Shell's integrated gas division was the most significant, falling to $2.5 billion this quarter from $4.9 billion in first-quarter 2023. In fourth-quarter 2022, the division’s adjusted earnings reached a historical high of $5.97 billion.

Shell attributed the decrease in integrated gas' adjusted earnings in second-quarter 2023 to lower prices and unfavorable trading and optimization results. The decline in trading and optimization results was mainly influenced by seasonal factors and reduced opportunities for optimization, in contrast to the robust performance seen in first-quarter 2023.

The adjusted net profit for the upstream business was $1.68 billion; for the marketing business, it was $894 million; for the chemicals and products business, it was $450 million; and for the renewable and energy solutions business, it was $228 million. 

Shell will implement a $3 billion share buyback program for the next 3 months, expected to be completed by third-quarter 2023 results announcements. At the same time, the company implemented the previously announced dividend increase of 15%, to $0.33/share.

Shell reduced its net debt to $40.3 billion by the end of the second quarter, down from $44.2 billion 3 months earlier. As a result, the debt-to-capital ratio decreased by one percentage point to 17%. Furthermore, Shell adjusted its cash capex outlook range for 2023, lowering it to $23-26 billion.