Shell profits plunge on lower oil prices
Oil firm Royal Dutch Shell’s profits have plunged to their lowest since 2016, due to lower oil and gas prices. Shell’s second quarter profits dropped 25% to $3.6bn (£3bn), far below analysts’ expectations of $4.9bn.
The oil giant blamed “challenging macroeconomic conditions” in refining and chemicals, as well as falling oil prices. In June, the price of oil slipped to its lowest level in five months due to a dim outlook for global demand.
BP, its smaller UK rival, reported quarterly profits that beat expectations earlier in the week, holding steady at about $2.8bn, while France’s Total and Norway’s Equinor said profits fell.
Shell’s shares dropped 3.9% in early London trading. The company held its dividend for the three-month period at $0.47 per share for a total payout of $3.8bn.
Separately, Shell said it had finished the first round in its plan to buy its own shares, having spent $9.25bn over the past year. It plans to spend $25bn by 2020.
Companies say they use share buybacks to return cash to shareholders, but critics say dividends are a better way to do that and that buybacks are merely a way of flattering a company’s earnings per share.