LONDON: Shell on Friday reported a 28% drop in first-quarter net profit to $5.58 billion, beating analyst expectations, and kept the pace of its share buyback programme steady amid falling oil prices and lower refining margins than last year.
It said it would buy back $3.5 billion worth of shares for the next three months, the fourteenth consecutive quarter of a buyback programme of at least $3 billion.
That contrasts with rival BP, which has sharply cut its buybacks this year to shore up its balance sheet. Shell’s gearing, a debt-to-equity ratio, of 18.7% is less than BP’s 25.7%.
Shell’s adjusted earnings, its definition of net profit, reached $5.58 billion in the first quarter, above an average forecast of $4.96 billion in a company-provided analyst poll, but below $7.73 billion a year ago.
At a strategy update in March, Shell pledged to return more cash to shareholders on the back of higher liquefied natural gas sales, mainly via buybacks, trimmed its investments through 2028 and raised the prospect of selling or closing some chemicals assets.
The company on Friday reiterated its reduced annual investment budget of $20-$22 billion for this year.
Its indicative refining margin stood at $6.2 per barrel, down from $12 per barrel a year ago, but up from $5.5 per barrel at the end of last year.
Global benchmark Brent crude prices averaged around $75 a barrel during the January-March quarter, compared with around $87 a year earlier.
Shell said its gas trading business was in line with the previous quarter despite a hit from expiring hedging contracts.
That contrasts with BP, which said that a weak result in its gas trading business weighed on its first-quarter results.
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