The energy crisis helped fuel record payouts for shareholders between July and September, as investors reaped the benefits of surging prices that have produced bumper profits for oil and gas companies.
Data from asset manager Janus Henderson showed global companies collectively paid investors $416bn (£349bn) in the three months to September. That was 7% higher than the same period last year, and marked a record level for third-quarter payouts.
About $46bn of that came from oil and gas producers, which the asset manager credits as the “overwhelming drivers of growth”, having increased dividends by around 75% over the period. That helped offset a drop in mining company payouts, as firms weathered a drop in metals prices linked to fears of a global recession.
Oil producers have been among the largest beneficiaries of the energy crisis, with wholesale gas prices having risen considerably following Russia’s invasion of Ukraine. That includes UK-listed BP, which earlier this month reported what it said were “exceptional” profits of $8.2bn in the third quarter.
The huge earnings have fed calls for an extension of the UK’s windfall tax on oil and gas firms, which has so far failed to capture excess profits from firms like Shell, which has made a record $30bn so far this year but has yet to pay the extra levy thanks to tax reliefs on North Sea investments.
The chancellor, Jeremy Hunt, is reportedly looking to toughen the existing energy profits levy on North Sea oil and gas operators, and could raise it from 25% to 35% and extend it by two years until 2028 in his autumn statement on Thursday.
The Janus data also showed that the weaker pound – which plunged in the wake of the government’s disastrous mini-budget in September – ate into shareholder payouts across the UK, which fell 6.4% in the quarter compared with a year earlier.
That was despite 84% of British companies either increasing their dividend or holding them steady in the quarter, including oil companies and banks that benefited from rising interest rates.
Janus Henderson is now forecasting that global dividends will reach $1.6tn for the whole of 2022, $30bn more than previously expected, due in part to energy sector payouts.
However, its experts warned that investors should not expect oil and gas dividends to remain at current levels much longer.
“Like other commodities, energy prices are cyclical, and the oil price is already lower than levels reached earlier this year, so the current exceptional level of payouts is unlikely to be permanent,” Jane Shoemake, a portfolio manager for the firm’s global equity income division said.
She added that a slowdown in global economic growth would also impact global profits and companies’ ability to increase payouts next year.
