Shell Raises Dividend As Retail Boost Drives Confidence

But following its strong quartlerly results, Shell outlined a long-term plan to reduce debt to $65 billion and to aim for shareholder distributions of 20-30% of cash flow. Its debt at the end of September was $73.5 billion, down from $77.8 billion in the previous quarter.

Shell’s capital investment will remain in a range of between $19 and $22 billion in the near term while it targets annual divestments of $4 billion.

STRONG MARKETING

Shell said the pandemic’s impact on demand has extended into the fourth quarter, with refining expected to run at 69% to 77% of capacity.

“As a result of COVID-19, there continues to be significant uncertainty in the macroeconomic conditions with an expected negative impact on demand for oil, gas and related products,” Shell said in a statement.

Its adjusted earnings in the third quarter fell 80% to $955 million, but easily beat company-provided average analysts forecasts of a $146 million profit.

Shell increased its quarterly dividend to 16.65 cents.

“Very strong performance from Shell, handsomely beating our and consensus estimates,” Bernstein analyst Oswald Clint said in a note.

The results were driven by a record profit from Shell’s marketing division, which includes the world’s biggest retail network. Earnings in the segment were up 10% on the year at $1.6 billion for the quarter on 20% lower product sales than a year ago.

Shell, the world’s biggest Liquefied Natural Gas trader, wrote down the value of its LNG portfolio by just under $1 billion in the quarter, focusing on its flagship Prelude project in Australia.

Shell in July had cut the value of its oil and gas assets, including Prelude, by $16.8 billion in the second quarter after sharply lowering its price outlook.

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