Shell’s $6bn profit smashes forecasts as LNG offsets weak refining

LONDON: Shell reported on Thursday third-quarter profits of $6 billion that exceeded forecasts by 12% as higher liquefied natural gas (LNG) sales offset a sharp drop in oil refining and trading results.

The results, together with a drop in debt and strong cash flow, could lift investor confidence in CEO Wael Sawan’s efforts to boost the company’s performance by the end of 2025 as he focuses on the most profitable businesses, primarily in oil, gas and biofuels.

Shell shares were up 3.2% at 1541 GMT.

Global refining margins have dropped sharply in recent months in the face of weaker economic activity and the start-up of several new refineries in Asia and Africa, while oil prices fell 17% in the quarter.

Shell, which operates five refineries, saw a near 70% annual drop in profits for its refining and chemicals division. But that was offset by a 13% rise in profits from its LNG division, the British company’s largest business.

“The consistency in performance is impressive,” Barclays analysts said in a note.

French rival TotalEnergies reported on Thursday third quarter profits at a three-year low of $4.1 billion, hit by collapsing refining margins and upstream outages, missing market forecasts. And BP on Tuesday reported a 30% drop in profits to $2.3 billion, the lowest in almost four years.

Top US producer Exxon Mobil and Chevron report results on Friday.

Shell’s adjusted earnings of $6.03 billion, its definition of net profit, far exceeded analysts’ expectations of a $5.36 billion profit but were down 3% from a year earlier.

The company said it would buy back a further $3.5 billion of its shares over the next three months, at a similar rate to the previous quarter. Its dividend was unchanged at 34 cents per share.

“We’ve delivered another strong set of results, showing resilience through the cycle and continuing to make significant progress in strengthening our balance sheet,” Chief Financial Officer Sinead Gorman told reporters.