(Bloomberg) — Shell Plc said it would boost investor returns through the end of this decade by reinforcing its position as the world’s top trader of liquefied natural gas.
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The London-based energy giant will expand LNG sales, the key driver of profit growth in recent years, by 4% to 5% annually until 2030, according to a statement on Tuesday. This will help the company return as much as half its cash from operations to investors, with a preference for share buybacks.
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It’s the first glimpse at Shell’s long-term strategy after Chief Executive Officer Wael Sawan’s two-year “sprint” to shake up the company by cutting costs, improving reliability and shedding under-performing units. The CEO will lay out his plans for investors in greater detail later in the day in New York.
“We want to become the world’s leading integrated gas and LNG business,” Sawan said in the statement. “Today we are raising the bar across our key financial targets, investing where we have competitive strengths and delivering more for our shareholders.”
Shares of the company rose 2.3% to 2,787.5 pence as of 12:06 p.m. in London trading.
Shell outlined a raft of measures including further cost reductions and a tight rein on spending. It will review its chemicals business and explore partnership opportunities in the US and potential asset sales or plant closures in Europe.
These plans mean Shell’s free cash flow per share will grow by an estimated 10% a year to 2030, and the company will distribute 40% to 50% of cash flow from operations to shareholders, up from a previous target of 30% to 40%.
Rising payouts have been a key part of the industry’s appeal to investors in recent years. Shell has been buying back $3.5 billion of shares a quarter and increasing its dividend by 4% annually, reaching 34.4 cents a share in the fourth quarter of 2024.
That’s still below the 47 cents a share Shell paid out at the end of 2019, before slashing its dividend in 2020 as energy prices slumped during the Covid-19 pandemic. Even so, investors have so far liked what they’ve seen from Sawan, with the company’s shares up almost 20% in past two years, compared with a decline of more than 10% for fellow London-based major BP Plc.
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