British energy company Shell’s adjusted profit rose 24 percent in the first quarter to $6.92 billion. The company benefited from rising oil and gas prices in response to the war in the Middle East. The company announced this in a press release today.
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Shell Defies Expectations
The results exceeded analysts’ expectations, who had forecast a profit of $6.36 billion. Adjusted profit excludes extraordinary or one-time items that could distort the company’s normal performance, and Shell uses this metric instead of net profit as the primary measure of how well it is performing in its day-to-day operations.
Oil and gas production fell by four percent compared to the previous quarter due to the U.S. and Israel’s war against Iran. The conflict damaged the Pearl gas plant in Qatar; according to the company, repairs could take about a year. Shell also expects a decline in production in the second quarter due to the closure of the Strait of Hormuz and planned maintenance of facilities. Shell also announced a reduction in the pace of its quarterly share buyback to $3 billion from $3.5 billion. However, it is increasing its dividend by five percent.
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Energy Stocks Rally
Energy companies have recently seen significant growth in share prices, as fossil fuel prices have risen sharply since the start of the war in the Middle East at the end of February. Oil prices have risen by about 40 percent since the start of the year. Shell’s shares have gained 17 percent this year, Reuters reported.
Last month, Shell announced that it had agreed to buy the Canadian energy company ARC Resources for $16.4 billion. The company aims to increase its production through this acquisition.
Source: Reuters
