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Highlights
- Shell Plc on Thursday announced its highest ever quarterly profit since 2008, amid a sharp surge in oil and gas prices around the world and fueling calls for a one-off windfall tax on energy companies.
- The oil giant has also announced the second tranche of the share buyback programme.
Multinational oil and gas company Shell Plc (LON: SHEL) has been in the spotlight after the company announced its highest ever quarterly profit on Thursday since 2008, amid a sharp surge in oil and gas prices around the world and fueling calls for a one-off windfall tax on energy companies.
The windfall tax is a one-time levy that a government imposes on companies that generate unexpectedly high profits because of some economic activity, such as the Russia-Ukraine war. Experts have said that a one-off levy on oil and gas companies would raise billions of pounds that could help vulnerable families with their energy bills.
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However, the Boris Johnson government has resisted calls for such a levy as it may discourage oil and gas producers from making an investment in domestic energy. The oil giant has also announced the second tranche of the share buyback programme.
Q1 Results
The energy giant on Thursday reported a 43% increase in Q1 2022 adjusted earnings to US$9.13 billion from US$6.39 billion in Q4 2021, and nearly triple of its US$3.23 billion profit for the same period last year. The first-quarter earnings have beaten the expectations of analysts of US$8.6 billion.
The company said it has taken a US$3.9 billion hit from its decision to pull out of Russia after the invasion of Ukraine in February. It came after BP Plc reported a US$25.5 billion hit from its decision to ditch its 19.75% interest in Russian oil giant Rosneft. Shell Plc previously announced that it expects something between US$4 billion and US$5 billion hit in its accounting charges.
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The energy giant’s total shareholder distributions in the first quarter amounted to US$5.4 billion and declared its quarterly dividend of US$25 per share, up from US$0.24 in Q4 2021 and US$0.17 in Q1 2021.
The energy giant announced a total worth of US$8.5 billion share buyback programme for the first half of FY 2022, of which US$4 billion has already been completed between 3 February and 4 May 2022. The remaining US$4.5 billion share buybacks are scheduled to be completed before the announcement of second-quarter earnings.
Also Read: BP Plc profits soar amid calls for an energy windfall tax. Should you invest?
Share price performance
Shell Plc (LON: SHEL) is listed on the Main Market of the London Stock Exchange since 31 January 2022 after it combined its A (code RDSA) and B (code RDSB) shares into a single line of ordinary shares. The energy giant is a constituent of the FTSE 100 Index and has been performing well lately due to the sharp rise in oil and gas prices in the global market after Russia invaded Ukraine.
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Its share value appreciated by 64.65% over the last one year as of 5 May 2022, while its year-to-date return stands at 41.48%. The market cap of the company stands at £167,023.21 million as of 5 May 2022. Shares of Shell Plc were up by 3.12% at around 11:55 AM (GMT +1) on 5 May 2022, at GBX 2,294.00.
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Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
