Shell handy $3.5bn to shareholders regardless of fall in income | USAEMALL.com

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Shell has announced $3.5bn of share buybacks, maintaining its strategy of returning large amounts of cash to shareholders, despite a sharp fall in first-quarter profits.

The UK-listed energy major on Friday reported adjusted earnings of $5.6bn in the first quarter, down 28 per cent year on year but roughly 10 per cent ahead of analysts’ expectations. Its share price rose nearly 3 per cent in early trading.

Chief executive Wael Sawan said in March that Shell could maintain its buybacks even if oil prices fell to $50 a barrel and could continue to pay its dividend at $40 a barrel. On Friday, Brent crude was trading at $63, down from $76 at the start of the year.

Shell said it had now bought back more than $3bn of its own shares for 14 quarters in a row and returned 45 per cent of free cash flow to shareholders over the past year. The company, which has been trying to narrow the valuation gap with US rivals ExxonMobil and Chevron, also held its dividend steady at 36 cents a share in the first quarter.

Unlike its peers BP and Eni, which have trimmed planned spending in response to the decline in oil prices, Shell said it would stick to its planned $20bn to $22bn of capital expenditure this year.

A solid performance in its main oil and gas businesses and from its retail network of petrol stations offset continuing financial weakness in Shell’s chemicals business, which it has put under strategic review, and in its renewables and power business.

Shell said it had closed its acquisition of Pavilion, a Singapore-based gas business, in the first three months of the year, a deal that analysts said would materially increase the FTSE 100 group’s sales of liquefied natural gas.