Shell profits leap to record £68.1bn in 2022 after energy price surge

It comes amid continued questions over the scale of windfall taxes on energy producers after they benefited from higher prices.

Shell said it paid 1.9bn dollars (£1.5bn) in windfall tax charges to the UK and EU.

Bumper profits by energy producers in 2022 prompted the government to launch a windfall tax, called the Energy Profits Levy, which was then toughened by Chancellor Jeremy Hunt.

The London-listed oil major told investors that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) leapt 53 per cent against the previous year, after energy prices were catapulted higher following the Russian invasion of Ukraine.

Adjusted earnings, including taxes, more than doubled to 39.9bn dollars (£32.2bn).

The figures are part of a debut set of results for Wael Sawan, who took over as chief executive at the start of the year.

Shell also announced that it will pay a further 4bn dollars (£3.2bn) to shareholders through a new share buyback programme, and will increase dividend payments by 15 per cent.

Mr Sawan said: “Our results in Q4 and across the full year demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.

“We believe that Shell is well positioned to be the trusted partner through the energy transition.

“As we continue to put our powering progress strategy into action, we will build on our core strengths, further simplify the organisation and focus on performance.

“We intend to remain disciplined while delivering compelling shareholder returns, as demonstrated by the 15 per cent dividend increase and the four-billion-dollar share buyback programme announced today.”

Campaigners from Greenpeace said Shell is “profiteering from climate destruction” after the record profit haul.

“While Shell counts their record-breaking billions, people across the globe count the damage from the record-breaking droughts, heatwaves and floods this oil giant is fuelling,” Greenpeace senior climate justice campaigner Elena Polisano said.

Richard Hunter, Head of Markets at interactive investor, commented “Following the clues provided last week by US titans Exxon Mobil and Chevron, Shell has posted record annual profits which erase the financial pandemic pain.

"Full-year profits of $41.6bn compare with numbers of $17.5bn the previous year and also comfortably exceed the previous record of over $31 billion set in 2008. A combination of higher prices, trading and refining margins all helped propel the overall result, while the sheer scale of cash generation also enabled some generous spring cleaning of the overall financial position.

“The upswing in cash flow has been put to use across the sprawling group. Overall net debt has reduced to $44.8bn from $52.6bn a year previously, while a share buyback programme of $4bn was also announced.

"An increase to the dividend puts the prospective yield in excess of 3.6 per cent, which has been and will continue to be a healthy addition to any capital return on the shares.”