Business

Shell profits leap to record £68.1bn after surge in energy prices

Henry Saker-Clark, PA Deputy Business Editor

Shell has recorded its highest profit in the energy giant’s 115-year history as it benefited from soaring energy prices.

It said that core profits rocketed to $84.3 billion (£68.1bn) in 2022, surpassing the expectations of industry experts.

Shell’s latest profit haul will increase pressure on Prime Minister Rishi Sunak and Chancellor Jeremy Hunt to tax energy producers further, as households come under pressure from sky-high bills.

Bumper profits by producers in 2022 prompted the Government to launch a windfall tax, called the Energy Profits Levy, which was then toughened by Mr Hunt.

Shell said it paid $1.9bn (£1.5bn) in windfall tax charges to the UK and EU.

Labour accused Mr Sunak of being “too weak” to stand up to oil and gas interests following Shell’s profit increase.

Shadow climate change secretary Ed Miliband said: “As the British people face an energy price hike of 40 per cent in April, the Government is letting the fossil fuel companies making bumper profits off the hook with their refusal to implement a proper windfall tax.”

Lib Dem leader Sir Ed Davey said: “No company should be making these kind of outrageous profits out of Putin’s illegal invasion of Ukraine.

“Rishi Sunak was warned as chancellor and now as Prime Minister that we need a proper windfall tax on companies like Shell and he has failed to take action.”

Shell also announced that it will pay a further four billion dollars (£3.2 billion) to shareholders through a new share buyback programme, and will increase dividend payments by 15 per cent.

The London-listed oil major told investors that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) leapt 53 per cent against the previous year, after energy prices were catapulted higher following the Russian invasion of Ukraine.

Adjusted earnings, including taxes, more than doubled to $39.9bn (£32.2bn).

The figures are part of a debut set of results for Wael Sawan, who took over as chief executive at the start of the year.

Shell added that core profits hit 20.6 billion dollars (£16.6 billion) in the fourth quarter of 2022, although this represented a 4 per cent decrease on the same period in 2021.

Mr Sawan said: “Our results in Q4 and across the full year demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.

“We believe that Shell is well positioned to be the trusted partner through the energy transition.

“As we continue to put our powering progress strategy into action, we will build on our core strengths, further simplify the organisation and focus on performance.

“We intend to remain disciplined while delivering compelling shareholder returns, as demonstrated by the 15 per cent dividend increase and the four-billion-dollar share buyback programme announced today.”

Campaigners from Greenpeace said Shell is “profiteering from climate destruction” after the record profit haul.

“While Shell counts their record-breaking billions, people across the globe count the damage from the record-breaking droughts, heatwaves and floods this oil giant is fuelling,” Greenpeace senior climate justice campaigner Elena Polisano said.

Business