Royal Dutch Shell Plc shares remained on the back foot through Thursday as quarterly results failed to excite and activist investor Third Point called for the oiler to be broken up, to separate the fossil fuel and renewable energy businesses.
Shell chief executive finance director Jessica Uhl said the hedge fund’s proposal would not work in real life.
“If you were to split that into component pieces, I think that can sound really interesting from a financial perspective,” Uhl said to media outlets.
“But in terms of real solutions, I think that breaks down and our ability to integrate and bring these different pieces of the puzzle together will be how we uniquely make a difference in the energy transition.”
Earlier this morning, Shell’s third-quarter results boasted the company’s highest tally of cashflow in its history, though other key metric fell short of expectations – with upstream profits at US$1.68bn, shy of the US$1.9bn forecast, whilst downstream was US$1.6bn versus US$2bn, and the integrated gas unit was marked at US$1.68bn rather than US$2.16bn.
Shell’s third-quarter results showed its highest ever cash flows from operations which tallied some US$17.5bn excluding working capital. The Anglo-Dutch group reported some US$13.46bn of earnings (adjusted EBITDA on CCS basis). It also said it maintained disciplined cash capex totalling US$13.2bn for the first nine months of 2021.
“We expect focus on weak earnings performance, cash swings, activist activity, the new emissions targets, and how Shell plans to be able to get its CFFO-based and Permian proceeds buybacks done,” UBS analyst Jon Rigby.
In London, Shell shares were down 24p or 1.36% changing hands at 1,743p.