Shell has reported record operating profits of $9.1bn (£7.2bn) for the start of its financial year though its bottom line was hit by the cost of the company’s phased withdrawal from Russia over the war in Ukraine.
The FTSE 100 energy firm booked a $3.9bn (£3.1bn) charge related to its decision to exit the Russian market, including its joint ventures with Gazprom, which was revealed in March.
It is also ending oil and gas trading with Russia.
But the company said a strong performance by its trading arm, alongside higher oil and gas prices, helped its core adjusted earnings up by 43%.
The $9.1bn sum was the highest first quarter level achieved by the company and beat the expectations of analysts.
The writedown over Russia meant its income attributable to shareholders profit measure was down by 38%, Shell said, at $7.1bn (£5.7bn).
The results, however, reflect a golden earnings season for the company and its competitors including BP thanks to the high price environment.
Shell said it would reward shareholders with a planned 25 cents a share dividend – a rise of 4%.
Dividend payments and share repurchases during the January-March quarter reached $5.4bn, the company revealed, as it continues its plan to buy back $8.5bn (£6.8bn) in shares during the first half of 2022.
It expected shareholder distributions to exceed 30% of cashflow in the second half of the year.
In his remarks to investors, chief executive Ben van Beurden gave a nod to the UK firm’s efforts to bolster energy security amid the anticipated disruption to supplies caused by the West turning its back on Russia.
He said: “The war in Ukraine is first and foremost a human tragedy, but it has also caused significant disruption to global energy markets and has shown that secure, reliable and affordable energy simply cannot be taken for granted.
“The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide.
“We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can.”
Shares, which suffered along with the company’s earnings during the worst of the COVID crisis, are up 37% in the year to date.
They rose by a further 2% at the market open.
Freetrade senior analyst Dan Lane said the shareholder rewards were eye-catching in the current energy price environment.
“Dividends are in full flow and, like BP earlier this week, so are the share buybacks.
“But, just like BP, the stream of renewables businesses Shell has been snapping up gets only a nod towards the bottom of the page. It’s a growing area of the business but it’s still a minuscule part of Shell’s earnings,” he wrote.
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