Shell profits beat forecasts and buybacks continue

Profits at Shell have come in higher than expected, providing a boost to efforts by the oil major to close the valuation gap with its American peers.
Adjusted profits fell to $6 billion during the third quarter, down from $6.2 billion a year earlier but surpassing the $5.4 billion expected by analysts.
In a further fillip to shareholders the FTSE 100 group also announced a further $3.5 billion in share buybacks over the coming months, marking the twelfth quarter in a row that it has announced buybacks in the range of $3 billion to $4 billion.
The chemicals business recorded a loss of $111 million, as margins across the industry remain under pressure.
Earlier this year Shell halted work on the construction of one of Europe’s largest biofuel plants, which meant that it took a hit of almost $800 million to earnings, and the chemicals business suffered a $708 million impairment mainly relating to the sale of its Singapore refineries.
The group was boosted in the third quarter, however, by a strong performance from its integrated gas division, where adjusted profits rose to almost $2.9 billion from $2.5 billion a year earlier. Upstream earnings also increased to $2.4 billion from $2.2 billion despite a weaker oil price: Brent crude, the international benchmark, averaged $80.34 a barrel over the quarter, down from $86.75 a barrel a year earlier
Wael Sawan, Shell chief executive, said: “Shell delivered another set of strong results. We continue to deliver more value with less emissions whilst enhancing the resilience of our balance sheet.”
Sawan, who was appointed to the top job at the start of last year, has pledged to be ruthless in improving performance and in focusing capital on the most profitable parts of the business, primarily in oil and gas. He has been trying to “de-bureaucratise” the energy group and to focus on areas where it has a competitive advantage, such as liquefied natural gas production and trading.
Shell is still valued at a discount to its American rivals, which has led to questions over whether Sawan will switch its listing from London to New York in an effort to close the valuation gap.
The group has outperformed BP, however, and recorded a more muted share price decline of just over 3 per cent since the start of this year, compared with a 20 per cent fall sustained by its London-listed rival.