LONDON, July 31 — British energy giant Shell on Thursday said its net profit slid 23 per cent in the first six months of the year, hit by lower oil and gas prices.
Profit after tax dropped to US$8.4 billion (RM36 billion) compared with US$10.9 billion in the first half of 2024, Shell said in an earnings statement.
Group revenue dropped nearly nine per cent to US$136.6 billion in the reporting period.
Shell pointed to “lower realised liquids and gas prices”, while chief executive Wael Sawan said the company had been operating “in a less favourable macro environment”.
Energy prices have come under pressure in recent months on concerns that US President Donald Trump’s tariffs will hurt economic growth, while Opec+ nations have produced more oil.
“Against a backdrop of geopolitical and economic uncertainty we saw knock-on effects on both physical trade flows as well as commodity prices and margins more broadly,” Sawan added.
“In spite of this, we delivered a robust set of results, with strong operational performance.”
Shell’s adjusted earnings beat market expectations, helping to lift its share price by 2.5 per cent in early London trade.
Its stock won additional support from Shell’s latest dividend payment and news that it plans to repurchase US$3.5 billion of shares.
“Shell’s diversity of operations across oil, gas, chemicals, and retailing regularly allows one area of strength to counter another of weakness,” Keith Bowman, equities analyst at Interactive Investor, said following the results update.
However he cautioned that “heightened geopolitical tensions and potential for operational disruption remain an investor concern”.
Shell in March announced plans to slash costs by billions of dollars and increase shareholder returns, as it focuses on its liquified natural gas (LNG) business.
Shell aims to reduce costs by between US$5 billion to US$7 billion by 2028, compared with 2022 levels.
Savings to date stand at US$3.9 billion, Sawan noted Thursday.
Shell’s previous target had been for savings of between US$2 billion and US$3 billion by the end of 2025, which involved hundreds of job cuts across its oil and gas division.
Gas is being touted by energy companies as cleaner than other fossil fuels as countries around the world strive to reduce their emissions and slow global warming.
Earlier this year, Shell’s British rival BP launched a major pivot back to its oil and gas business, shelving its once industry-leading ambitious renewable energy strategy.
BP publishes its latest earnings on Tuesday. — AFP