Shell looks to share more of its huge profits

CEO Ben van Beurden told Reuters that the energy giant has been in talks for months over what to do the windfall earnings, which has arrived through economic recovery post-pandemic and the Russian invasion of Ukraine.

“We have to look after our shareholders because I think our shares are very significantly underpriced,” he told the news agency.

“Therefore giving back more to shareholders to help that part of the equation is going to be very important.”

London-listed Shell has seen its share price increase 14% this year, to £19.39, but the price remains below pre-pandemic levels of 2019. Shell posted record quarterly earnings of $9.1 billion in May during its first quarter results, and increased its dividend by 4%.

Giant profits made by Shell and rivals like BP have led to the UK imposing a windfall tax on North Sea producers, increasing the headline rate by 25%.

Ben van Beurden told Reuters that management is considering whether its current shareholder return policy of 20-30% of cash from operations is the right amount.

He did not say whether a new policy would include a higher dividend.

As well as returns to shareholders, the Shell CEO said extra cash would be used to “look after a balance sheet repair”, cutting debt that increased during Covid.
Shell will report its second-quarter results on July 28.

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