Derren Nathan, head of equity research at Hargreaves Lansdown, said: “As expected, Shell’s integrated gas production was adversely impacted by the closure of its Qatari LNG facility following Iranian missile strikes in March.
“But save for lower margins from its lubricant products, all other parts of the business pulled together strongly to power a substantial earnings beat.
“One consequence of the disruption in the Middle East is higher realised prices. Another is heightened volatility on which the group’s trading division thrives.
“Adding in new production in Brazil and the Gulf of America, and refineries running at full capacity has led to a very strong performance on the bottom line.
“That’s also resulted in a spike in free cash flows, which have nearly trebled to $17.5bn, helping to take a big chunk out of net debt while supporting the 19th consecutive buyback of at least $3bn.
“Today’s results validate ongoing efforts to optimise the business mix with Jiffy Lube now divested and the ARC Resources takeover set to complete and provide a fresh LNG capacity this quarter. With most of that deal funded by share issuance the prospects for further generous payouts to shareholders look promising.”
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