Anger as British Gas owner Centrica profits surge; Shell’s earnings fall to $5bn – business live

Protesters from Greenpeace UK have erected a giant spoof advertising billboard outside Shell’s HQ this morning, calling out the company for posting profits of nearly £4bn ($5.1bn) in the April-June quarter.

The billboard links Shell’s fossil fuel-driven earnings to the devastating wildfires linked to climate change in Southern Europe, North Africa and North America.

It features an image of a Greek firefighter battling to contain a wildfire near Athens last week, is emblazoned with Shell’s logo and features the slogan “Our profit, your loss”.

Maja Darlington, campaigner at Greenpeace UK, said:

“While millions attempt to rebuild their lives after months of extreme weather has wreaked havoc from Rhodes to Rajasthan, Shell is upping oil and gas production, slashing investment in renewables and posting billions of dollars in profits. They’re partying like there’s no tomorrow and ordinary people around the world are being forced to pick up the tab.

“It is blazingly clear that global leadership is needed to end this fossil fuel free-for-all, but instead the UK government is flip-flopping on its climate commitments and further enriching the oil giants with new fossil fuel developments. It’s time for the government to find its backbone and force Shell and the rest of the industry to stop drilling and start paying for the damage they are already causing around the world.”

Shell’s CEO, Wael Sawan, was criticised by climate campaigners this month for claiming that cutting the world’s oil and gas production would be dangerous and irresponsible.

Since Sawan took over last September, Shell has abandoned plans to cut oil production each year for the rest of the decade.

Shell actually paid more cash to its shareholders during the last quarter than it made in profit.

The energy giant paid $2bn in dividends during April-June, and also repurchased shares worth $3.6bn through its buyback programme.

That gives total total shareholder distributions in the quarter of $5.6bn.

But this morning, we’ve learned that its profits shrank to around $5bn in Q2.

Dr George Dibb, head of the Centre for Economic Justice at progressive thinktank IPPR, is unimpressed, saying:

“Shell has proven its commitment to putting profits and shareholders over our planet. It continues to make huge amounts of money off the back of the war in Ukraine and high energy prices.

Meanwhile, incredibly, Shell is now paying more out to its shareholders in dividends and buybacks than it makes in profit, clearly prioritising these transfers over investing a net zero future. If fossil fuel firms refuse to invest in decarbonisation then it’s right for the UK government, like the USA and Canada, to tax share buybacks to support greater public investment in the transition to net zero.”

The TUC has blasted the UK government for – it says – allowing energy companies to “laugh all the way to the bank”.

Following this morning’s jump in profits at Centrica, TUC General Secretary Paul Nowak said:

“While families across Britain have struggled to pay their bills, energy companies have been allowed to laugh all the way to the bank.

“The government could have imposed a proper windfall tax on excess profits. But instead it has chosen to leave billions on the table.

“This was a political choice that has benefited shareholders instead of hard-pressed households. Big oil and gas have gotten away with treating the public like a cash machine.

“Our failing energy retail companies should be brought into public ownership. That’s the way to bring down bills and invest in home improvements.”

Energy giant Shell has reported a drop in profits, down from its bumper results a year ago, due to the drop in energy prices this year.

Adjusted earnings at Shell roughly halved year-on-year in the second quarter of 2023, but that still left the company with profits of $5bn (£3.86bn), down from $9.6bn in January-March and almost $11.5bn a year ago.

Shell says the fall reflected lower profits from liquified natural gas (LNG), lower realised oil and gas prices, lower refining margins, and lower volumes.

Brent crude has traded between $70 and $90 a barrel this year, down from 2022 when it was as high as $139 and never lower than $75.

Despite this slowdown in profits, Shell has hiked its dividend by 15%.

It has also announced a new share buyback programme of $3bn, which follows the $4bn it announced in its first-quarter results, as it continued to funnel spare cash to shareholders.

Subject to Board approval, another share buyback programme of at least $2.5bn is expected to be announced at the third quarter 2023 results announcement, Shell adds.

British Gas has reported its highest ever first-half profits of almost £1bn after the energy watchdog let it claw back more money from household bills.

The UK’s biggest energy supplier reported profits of £969m for the first six months of 2023, up nearly 900% from £98m in the same period last year.

The profit boom is largely thanks to a tweak to the regulator Ofgem’s energy price cap that allows the supplier to recoup some of the costs of supplying its 10 million customers during the energy crisis.

The supplier’s historic profit highs are likely to anger consumer groups that have campaigned against the supplier’s treatment of vulnerable energy customers as record energy market prices forced millions into fuel poverty.

Good morning and welcome to our rolling coverage of business, the financial markets, and the world economy.

Energy group Centrica has posted a surge in earnings this morning as the owner of British Gas continues to profit from rising energy prices.

Centrica made a statutory operating profit of £6.5bn for the first six months of this year, up from a £1.1bn loss in 2022.

The figures were boosted a near 900% surge in profits at British Gas, which made £969m in January-June during the cost of living crisis, up from £98m a year ago.

British Gas’s profit boom is largely thanks to a tweak to the regulator Ofgem’s energy price cap that allows the supplier to recoup some of the costs of supplying its 10 million customers during the energy crisis, our energy correspondent Jillian Ambrose explains.

Centrica’s overall profits were swelled by £4.7bn from unwinding “unrealised losses from UK energy supply hedging positions at the end of 2022”.

Without that, it made an adjusted profit of £2.1bn, up from a £1.3bn loss a year ago, a figure that will reignite calls for wider windfall taxes on the sector.

As well as selling energy to consumers through British Gas, Centrica also produces it through gas and oil exploration and production assets, and a 20% interest in the operational UK nuclear power generation fleet.

Centrica chief executive. Chris O’Shea, who faced anger over his £4.5m pay packet earlier this year, says:

“Nothing is more important than delivering for our customers – its why we are here. Today’s results allow us to increase our customer support package to more than £100m, and the new green investment strategy we’ve announced will see us invest several billion pounds in the energy transition, creating thousands of new well-paid jobs.

Our robust balance sheet has allowed us to invest heavily in the UK and Ireland’s energy security and will make sure that our customers have cleaner energy at the right price.

Also coming up today

The European Central Bank is expected to raise eurozone interest rates at its latest meeting today, a day after the Federal Reserve lifted US borrowing costs to the highest in over two decades.

We also learn how the US economy fared in the second quarter of the year, when new GDP figures are released.

And NatWest remains under pressure in the row over the closure of Nigel Farage’s bank account, following the resignation of Dame Alison Rose as CEO yesterday

The agenda

• 11am BST: CBI distributive trades survey of UK retailers

• 1.15pm BST: European Central Bank interest rate decision

• 1.30pm BST: US durable goods orders for June

• 1.45pm BST: European Central Bank press conference

• 3pm BST: US pending home sales for June