Anger as Shell profits rocket to ‘obscene’ 115-year high
Shell has recorded the highest profit in its 115-year history as it benefited from soaring energy prices, fuelling anger over the amount of tax paid by the oil giant.
Political and environmental campaigners criticised the profit jump as “obscene” and “outrageous” as UK households face soaring energy costs.
On Thursday, Shell said that core profits rocketed to 84.3 billion dollars (£68.1 billion) in 2022.
The figure represents one of the highest profits ever recorded by a UK company.
Shell’s latest profit haul will increase pressure on Prime Minister Rishi Sunak and Chancellor Jeremy Hunt to tax energy producers further, given the pressure on UK households.
Bumper profits made by producers in 2022 prompted the Government to launch a windfall tax, called the energy profits levy, which was later toughened up by Mr Hunt.
In 2022, we delivered strong results.
As we look to 2023, we will put our #PoweringProgress strategy into action, providing the energy the world needs today and in the future.
Hear more from Shell CEO Wael Sawan. #ShellResults https://t.co/hHVdnYhfgZ pic.twitter.com/HSMXuLap7C
— Shell (@Shell) February 2, 2023
Shell said it was due to pay 134 million dollars (£109 million) through the UK windfall tax for 2022, representing a fraction of its mammoth profit. It said it expects to pay more than 500 million dollars (£405.7 million) due to the levy this year.
The company stressed that it paid 1.9 billion dollars (£1.5 billion) in total tax charges to the UK and EU last year.
Shell however also announced that it will pay four billion dollars (£3.2 billion) to its shareholders through a new share buyback programme, and will increase dividend payments by 15%.
Labour accused Mr Sunak of being “too weak” to stand up to oil and gas interests following Shell’s profit increase.
Shadow climate change secretary Ed Miliband said: “As the British people face an energy price hike of 40% in April, the Government is letting the fossil fuel companies making bumper profits off the hook with their refusal to implement a proper windfall tax.”
Liberal Democrat leader Sir Ed Davey said: “No company should be making these kind of outrageous profits out of Putin’s illegal invasion of Ukraine.”
Rishi Sunak was warned as Chancellor and PM that oil and gas giants were making outrageous profits. He ignored us, and now families struggle as oil companies rake it in. Yet another Tory failure.
— Ed Davey (@EdwardJDavey) February 2, 2023
The London-listed oil major told investors that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) leapt 53% against the previous year, after energy prices were catapulted higher following the Russian invasion.
Adjusted earnings, including taxes, more than doubled to 39.9 billion dollars (£32.2 billion).
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 added that core profits hit 20.6 billion dollars (£16.6 billion) in the fourth quarter of 2022, although this represented a 4% decrease on the same period in 2021.
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% dividend increase and the four-billion-dollar share buyback programme announced today.”
The Trades Union Congress called for the energy profits levy, the windfall tax which went up from 25% to 35% in January, to be increased further.
“These obscene profits are an insult to working families,” said TUC general secretary Paul Nowak.
“The Government must impose a larger windfall tax on energy companies. Billions are being left on the table.”
🚨 BREAKING: Shell has just announced record breaking annual profits of more than £32 BILLION.
So we paid their HQ a visit to deliver a message: STOP DRILLING, START PAYING.#MakeShellPay pic.twitter.com/e4WsVNFIHf
— Greenpeace UK (@GreenpeaceUK) February 2, 2023
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.
Shares in Shell were 3% higher at 2,438p on Thursday morning, giving the business a market valuation of around £170 billion.