Shell's Q2 Earnings Beat Expectations with 8% EBITDA and 14% Net Income Surplus, Shares Rise 1%

Shell PLC shares rose 1% after Q2 results beat expectations, driven by cost savings and strong performance in upstream and marketing businesses. EBITDA beat by 8% and net income by 14%. Operating cash flow was 25% ahead of consensus at $12.6 billion. Net debt rose 4%, largely due to higher lease liabilities in Brazil. Shell maintained its $3.5 billion share buyback and held the dividend steady at $0.358 per share.

Shell PLC announced its Q2 2025 financial results, which saw a 1% increase in share prices following the release. The company reported an adjusted earnings of $4.3 billion, despite a challenging macroeconomic environment. The results were driven by robust cash flows and strong performance in its upstream and marketing businesses.

Shell's earnings before interest, taxes, depreciation, and amortization (EBITDA) beat expectations by 8%, while net income rose by 14%. Operating cash flow (CFFO) was 25% ahead of consensus at $12.6 billion. The company also announced another $3.5 billion share buyback program for the next three months, maintaining its commitment to shareholder returns.

Shell's net debt increased by 4%, primarily due to higher lease liabilities in Brazil. The company's balance sheet remained strong, with a gearing ratio of 19%. The 2025 cash capex outlook remained unchanged at $20-22 billion. Total shareholder distributions paid over the last four quarters were 46% of CFFO.

Notable achievements in the quarter include the first cargo shipped from LNG Canada, enhancing Shell's leading position in liquefied natural gas (LNG). Additionally, Shell's deep-water portfolio was strengthened with the start-up of Mero-4 in Brazil and an increase in interests in Gato do Mato and Bonga.

Shell's Chief Executive Officer, Wael Sawan, commented on the results, stating, "Shell generated robust cash flows reflecting strong operational performance in a less favorable macro environment. Our continued focus on performance, discipline, and simplification helped deliver $3.9 billion of structural cost reductions since 2022, with the majority delivered through non-portfolio actions."

References:
[1] https://worldstagenews.com/shell-announces-4-3b-earnings-for-q1-2025-boosts-deep-water-portfolio-in-nigerias-bonga-asset-others/