By Shadia Nasralla
LONDON (Reuters) -Shell’s second-quarter adjusted earnings, its definition of net profit, tumbled by almost a third on Thursday, dragged down by a drop in oil prices, but still easily beat analysts’ forecasts.
The oil major said it would maintain the pace of its share buyback programme at $3.5 billion over the next three months, the 15th consecutive quarter of at least $3 billion.
Shell has, meanwhile, achieved $3.9 billion in cost cuts compared with 2022, part of a cost-cutting programme aimed at saving between $5 billion and $7 billion by the end of 2028.
It recorded cash flow from operations of $11.9 billion in the quarter, down from $13.5 billion a year ago.
Together with $2.1 billion in dividends, that brings shareholder distributions to 46% of operating cashflow, within its 40% to 50% guided range.
Shell’s adjusted earnings reached $4.264 billion in the second quarter, smashing the $3.74 billion average in an analyst poll provided by the company but down 32% from a year ago.
Global benchmark Brent crude prices averaged around $67 a barrel during the April-to-June quarter, compared with $75 a barrel in the first quarter and $85 a year earlier.
Crude oil prices fell in the quarter as OPEC+, made up of the Organization of the Petroleum Exporting Countries and allies such as Russia, began unwinding self-imposed production cuts aimed at supporting the market.
Their most recent decision calls for an oil output increase of 548,000 barrels per day in August.
Shell had guided in a trading update that it expected earnings to be hit by weaker trading in its integrated gas division and losses at its chemicals and products operations after an outage at its U.S. Monaca polymer plant.
(Reporting by Shadia NasrallaEditing by David Goodman and Joe Bavier)
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