Shell to Lift Dividend, Launch $5 Billion Buyback
Shell Chief Executive Wael Sawan Photo: Mary Turner for The Wall Street Journal By Christian Moess Laursen June 14, 2023 3:19 am ET Shell on Wednesday outlined plans to boost its dividend, buy back $5 billion in shares and reduce capital spending. The energy major said it will lift its shareholder distribution to 30%-40% of cash flow from operations through the cycle, with a 15% increase in dividend a share effective from the second quarter. Cash flow from operations is a measure of the cash a company generates from normal business operations. In addition, the company said it will launch share buybacks of at least $5 billion for the second half of 2023. Shell has been under pressure to increase dividends and share buybacks, moves that reward investors whil
Shell Chief Executive Wael Sawan
Photo: Mary Turner for The Wall Street Journal
Shell on Wednesday outlined plans to boost its dividend, buy back $5 billion in shares and reduce capital spending.
The energy major said it will lift its shareholder distribution to 30%-40% of cash flow from operations through the cycle, with a 15% increase in dividend a share effective from the second quarter. Cash flow from operations is a measure of the cash a company generates from normal business operations.
In addition, the company said it will launch share buybacks of at least $5 billion for the second half of 2023.
Shell has been under pressure to increase dividends and share buybacks, moves that reward investors while keeping the company on a tight leash with its spending on businesses.
Shell has had a policy of spending 20% to 30% of its cash flow from operations on dividends and share buybacks.
“An enhanced focus on performance and stronger capital and cost discipline will underpin higher shareholder distributions of 30-40% of [cash flow from operations] through the cycle,” Shell said.
Capital spending will be reduced to $22 billion-$25 billion a year for 2024 and 2025, Shell said. For 2023, the company previously guided for capital spending of $23 billion to $27 billion.
Shell said it will continue to invest in secure supplies of energy, as it extends its position in the upstream sector to strengthen cash flow by stabilizing liquids production to 2030, it said.
Write to Christian Moess Laursen at [email protected]
What's Your Reaction?
