Royal Dutch Shell PLC has decided to rebase its dividend to $0.24/share from 2021 second quarter onwards, an increase of 38% from the first quarter of the year. In addition, Shell is launching $2 billion of share buybacks, targeted to be completed by the end of this year.
“We committed to increase shareholder distributions once we reduced net debt. And today we are delivering on that commitment,” said Jessica Uhl, chief financial officer of Shell. At the end of second-quarter 2021, Shell’s net debt was $65.7 billion, compared with $71.3 billion at the end of the first-quarter 2021, mainly driven by free cash flow generation in the quarter.
Shell reported a net income of $3.4 billion for 2021 second quarter, which included post-tax impairment charges of $1.8 billion and charges of $1.2 billion due to the fair value accounting of commodity derivatives. Adjusted earnings for the quarter were $5.5 billion, compared with $638 million over the same period a year earlier and $3.2 billion for the first quarter of 2021.
The current quarter’s higher adjusted earnings benefited from higher realized prices, partly offset by lower trading and optimization margins. Trading and optimization contributions to earnings were significantly below average, mainly due to supply disruptions.
Cash flow from operating activities for second-quarter 2021 was $12.6 billion, which included negative working capital movements of $1.6 billion. Cash flow from investing activities for the quarter was an outflow of $2.9 billion, mainly driven by capital expenditure and partly offset by proceeds from sale of property, plant and equipment, and businesses.