Shell plans to shower shareholders with a further $3.5 billion (£2.8 billion) in share buybacks in the next quarter after reporting a better-than-expected profit of almost $8 billion in the first three months of this year.
The company reported first-quarter adjusted profit of $7.7 billion, lower than the $9.6 billion reported in the year-ago period but well above analysts’ expectations of $6.5 billion.
Shell CEO Wael Sawan said the results gave the company confidence to launch a further $3.5 billion share buyback program over the next three months. Shareholder dividends in the first quarter amounted to $5 billion, of which $2.2 billion was dividends and $2.8 billion was share repurchases.
The oil company, which paid out $23 billion in dividends to shareholders last year, reported a better-than-expected annual profit of more than $28 billion in 2023, making it one of its most profitable years on record.
Despite dividends to shareholders, oil companies face increasing pressure from some shareholders to tackle carbon emissions. The group, which includes French asset manager Amundi, insurance giant AXA and the British government’s National Employment Savings Trust (NEST), has issued a warning to Shell for failing to comply with the Paris climate change agreement.
Investors, coordinated by campaign group Follow This, plan to table a resolution on climate change at the company’s annual general meeting later this month. Mark van Baal, the group’s founder, said: “Large shareholders hold the key to tackling the climate crisis with their votes at general meetings. This resolution aims to give Shell a shareholder mandate to drive the energy transition.”
Shell’s share price hit a record high of just over 29 pounds a share earlier this week, in part as geopolitical upheavals in recent years have supported soaring gas and oil prices. But the company believes it’s worth more than that.
Former Shell CEO Ben van Beurden said last month that the oil company would prioritize a New York listing on the London Stock Exchange because US investors were “more positive” on fossil fuels. This sparked fears that the country would withdraw.
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The comments reignited concerns in the City about the exodus of London’s biggest listed companies to rival exchanges. Those concerns were exacerbated earlier this week when shareholders of Paddy Power owner Flutter voted to move its primary listing to New York. This follows Australian miner BHP’s unsolicited takeover bid for Anglo American, which could mean the miner disappears from the London Stock Exchange.
