Royal Dutch Shell reported lower-than-expected third-quarter adjusted earnings after taking a $400m hit from Hurricane Ida’s impact on operations and said it was setting new targets for carbon emission cuts
The company on Thursday said earnings fell by 25% quarter on quarter to $4.13bn, below analyst forecasts of $5.31bn and compared with $955m a year ago.
It also set new targets for carbon emission cuts, saying it was now aiming for 50% by 2030, compared to 2016 levels on a net basis.
The new goal covers Scope 1 and Scope 2 emissions, which cover its operations and electricity usage, but does not affect so-called Scope 3 output, released when customers burn fuel.
Shell said the results were also hit by adverse one-off tax impacts, lower production volumes partly due to the impact of Hurricane Ida, and comparative lower contributions from trading and optimisation. This was partly offset by higher oil, LNG and gas prices.
Net debt was $57.5bn down from $65.7bn at the end of the second quarter 2021, mainly driven by free cash flow generation in the quarter and partly offset by dividends and share buybacks.
The company declared a 24 cent dividend and said it had completed $1bn of share buybacks were completed out of a total target of $2bn in the second half of 2021. Extra shareholder distributions of $7bn related to the Permian assets sale would start in 2022, post deal completion.
Shell is facing shareholder pressure after Dan Loeb’s Third Point Capital took a $700m stake in the firm and on Wednesday demanded a breakup of the energy giant into two parts – one that produces fossil fuels and the other focused on renewables.
A Dutch court has also ordered the company to cut carbon emissions much faster than it had previously planned.
