Shell boosts buybacks as profit soars on high oil, gas prices

[LONDON] Shell expanded its share buybacks after reporting profit that comfortably exceeded analyst estimates on the back of surging energy prices.

The positive fourth-quarter earnings cap a tumultuous year in which Shell was targetted by activist investor Dan Loeb, relocated its headquarters to London and dropped "Royal Dutch" from its name.

Yet the company has also been buoyed by surging oil and gas prices, causing the biggest annual share-price gain in five years. "We delivered very strong financial performance in 2021, and our financial strength and discipline underpin the transformation of our company," chief executive officer Ben van Beurden said in a statement on Thursday.

"Today we are stepping up our distributions with the announcement of an US$8.5 billion share buyback programme."

The company's adjusted net income was US$6.39 billion for the period, up from US$393 million a year earlier and beating even the highest analyst estimate.

Cash flow from operations was US$8.2 billion in the fourth quarter, a reduction of almost 50 per cent from the preceding period due to working capital movements and margin calls.

Shell is the first European oil major to report earnings, following a mixed bag of results from its US peers. Last week, Chevron disappointed investors after its overseas upstream business and domestic refining network fell short of expectations.

Exxon Mobil however tripled its cash flow and said it would accelerate buybacks, elevating its shares to the highest since April 2019.

BLOOMBERG