Shell reports $6 billion Q3 profits

Shell reported third-quarter profits of $6 billion that exceeded forecasts by 12 per cent as higher liquefied natural gas (LNG) sales offset a sharp drop in oil refining and trading results.

The results, together with a drop in debt and strong cash flow, could lift investor confidence in CEO Wael Sawan’s efforts to boost the company’s performance by the end of 2025 as he focuses on the most profitable businesses, primarily in oil, gas and biofuels.

Shell shares were up 1.1 per cent in early London trading.

Global refining margins have dropped sharply in recent months in the face of weaker economic activity and the start-up of several new refineries in Asia and Africa, while oil prices fell 17 per cent in the quarter.

Shell, which operates five refineries, saw a near 70 per cent annual drop in profits for its refining and chemicals division.

But that was offset by a 13 per cent rise in profits from its LNG division, the British company’s largest business.

“The consistency in performance is impressive,” Barclays analysts said in a note.

French rival TotalEnergies reported on Thursday third quarter profits at a three-year low of $4.1 billion, hit by collapsing refining margins and upstream outages, missing market forecasts. And BP reported a 30 per cent drop in profits to $2.3 billion, the lowest in almost four years.

Shell’s adjusted earnings of $6.03 billion, its definition of net profit, far exceeded analysts’ expectations of a $5.36 billion profit but were down 3 per cent from a year earlier.

The company said it would buy back a further $3.5 billion of its shares over the next three months, at a similar rate to the previous quarter. Its dividend was unchanged at 34 cents per share.

“We’ve delivered another strong set of results, showing resilience through the cycle and continuing to make significant progress in strengthening our balance sheet,” Chief Financial Officer Sinead Gorman told reporters.