As Russia’s war in Ukraine continues to drive record profits, Shell and British Gas’s owners are giving billions of pounds back as dividends to shareholders.
Shell was among the big movers, gaining 1.2pc after posting another quarter of record profits.
Shell will purchase $6bn more shares (£4.9bn) in the third quarter. This follows an $8.5bn stock buyback in the first half.
This was after the FTSE 100 company’s profits jumped to $11.5bn over the three months ending June – the second consecutive quarter of record profits – as it capitalized on high oil prices.
Shell boss: It’s a difficult winter ahead
Ben van Beurden, chief executive of Shell, issues another warning about the harsh winter ahead. He says, “It would have been foolish not to plan for a contingency” should Russian supplies be cut further. Van Beurden claims that Shell limits the use of natural gases in its European facilities like Rotterdam.
He adds, “We need to be cautious.”
British Gas’s owner Centrica has resumed paying dividends for the first time since the outbreak of the pandemic. It shares the benefits of the energy crisis and the profits with investors.
The company will pay an interim amount of around one-third of the full year dividend at 1p per share. This was as operating profit rose to £857m.
Chris O'Shea, boss of British Gas owner Centrica, waived his £1.1million bonus last year. Today he refused to say if he'd do the same this year. Claims it's too early. I humbly disagree.
— Graham Hiscott (@Grahamhiscott) July 28, 2022
Centrica, British Gas’ boss, said that he expected the company’s phenomenal growth to continue in the second half of this year but also acknowledged the challenges facing consumers.
Chris O’Shea stated: “We are very conscious of the difficult environment many clients are facing and will continue to support them.”
After rapid growth in the share price, Centrica joined the FTSE 100 in May. It has already stated that it anticipates a rise in profits due to rising energy prices.
However, the public will not be happy with such high-profile profits at a time when rising energy costs are pushing many families into poverty.
Centrica stated that it anticipates paying around £600m in windfall taxes next year. Wholesale prices are not included.
Given the effect of rising energy costs on British households, these payouts could cause a backlash.
Rishi Sunak, the former Chancellor, announced a 25pc windfall tax for energy companies, including Shell and Centrica. This is expected to bring in approximately £5bn.
