Activist Investor calls for a break-up after Shell Love Misses reports

Royal Dutch Shell reported lower-than-expected earnings in the third quarter despite rising fossil fuel prices, a day after an active shareholder called for its split.

The energy company’s latest results have also strengthened its commitment to reduce emissions from operations, following a Dutch court ruling in May that it was not doing enough to reduce its carbon footprint.

Adjusted net profit for July-September fell to $ 4.1 billion, from $ 5.5 billion in the previous quarter, Shell said, even though cash flow from operations hit $ 17.5 billion, the highest ever.

Lower-than-expected earnings “Hurricane Eder reflects adverse effects and lower contributions from trading and optimization, partly offset by higher oil and gas prices,” it says.

Shell has been under pressure on several fronts since it emerged on Wednesday that activist hedge funds have formed a large stake in Third Point Company and called for Shell to split into “multiple independent companies” to provide better value to shareholders through a change of power.

Earlier this year, the Hague District Court ordered Shell to reduce all emissions, including disclosure of burning time by customers by 45 percent by 2030.

The agency said it would appeal the ruling but promised to reduce the perfect emission from its own activities, known as Scope 1 and Scope 2, by 50 percent by 2030 compared to the 2016 level on Thursday.

“This morning is not a clean set of results given the number of one-offs that affect earnings, but from one [cash flow] In this regard, Shell has reported strong results, ”said Biraj Borkhataria at RBC Capital Markets. “Given the news around the activist investor yesterday, we are not sure that investors will put too much weight on this new one. [emissions] The goal. ”

Shell said it welcomed the “open dialogue” with all shareholders, including Third Point, but did not mention any active investor proposals in its results statement.

It says it plans to reduce its oil production, which peaked in 2019, by 1 to 2 percent a year as it shifts costs to renewable energy and other low-carbon technologies such as hydrogen.

The company sold its Permian shale oil business in Texas last month for 9.5 billion, of which $ 7 billion has been promised to shareholders. The distribution of the funds, which already tops the buyback announced in the second quarter, will take place the year after the deal expires, Shell said Thursday.

“This quarter we have created record cash flows, maintained capital discipline and announced our intention to distribute $ 7 billion to our shareholders from the sale of our Permian assets,” Chief Executive Ben Van Bourdain said in a statement.

Shell hit ড 400 million earlier in the third quarter due to Hurricane Eder, which flowed into the Gulf of Mexico in late August and initially took about 95 percent of the region’s oil production and refining offline. Shell has just resumed production at its Olympus offshore facility – capable of producing the equivalent of 100,000 barrels of oil per day – in early October after more than a month of repairs.

Overall, oil and gas production in the last three months was at the same level as in the second quarter, the agency said.

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