Energy boost

Shell hikes dividend following 14-fold rise in profits

Shell in good shape

Energy giant Shell posted a forecast-beating uplift in full-year profit on rebounding commodity prices and an increase in business activity.

Earnings came in at $19.29 billion compared to $4.85 billion in the previous year. Analysts polled by Refinitiv had expected full-year 2021 net profit to come in at $17.8 billion.

For the final quarter of 2021, it reported adjusted earnings of $6.4 billion.

Shares in the company are 20% higher year-to-date, although the price is below pre-pandemic levels.

The board expects that the first quarter 2022 interim dividend will be set at $ 0.25 per share, an increase of around 4% over the US dollar dividend for the fourth quarter 2021. The first quarter 2022 interim dividend is scheduled to be announced on 5 May.

Chief executive Ben van Beurden said he plans to return $8.5bn to investors by buying back their shares.

“Today we are stepping up our distributions with the announcement of an 8.5 billion dollar share buyback programme and we expect to increase our dividend per share by around 4 per cent for Q1 (first quarter) 2022,” he said in an update to the stock market.

On the issue of a potential windfall tax, he said: “I’m not sure that windfall taxes, popular though they may seem, [are] going to help us with [energy] supply or help us with demand. But, of course, we stand ready to be in dialogue with the government on all measures.”

Stuart Lamont, investment manager at Brewin Dolphin, said: “The rising oil price has lifted Royal Dutch Shell and the company’s results are significantly better than they were this time last year. Debt has been reduced substantially, helped by the sale of Permain; cash flow is strong; and profits have followed.

“Of course, shareholders will be mindful of the transition period ahead for Shell, as it looks to reduce its carbon emissions and reach net zero.

“However, for now, the company is in good shape, with the shares buoyed by a combination of its share buyback programme, dividend, and the commodity price.”

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