Royal Dutch Shell launched a long-awaited $25 billion share buyback plan as it sought to shrug off disappointing second-quarter results.

The Anglo-Dutch energy group insisted it had had a “very good quarter” as profits excluding exceptional items rose to $4.7 billion, up from $3.6 billion a year earlier, aided by higher oil and gas prices.

The result was significantly below analysts’ expectations of almost $6 billion, however, because of factors including foreign exchange effects and rising operating costs.

Ben van Beurden, chief executive, admitted that it needed to “tighten the screws quite a bit” on parts of the business to avoid becoming “flabby”.

The shares fell more than 3 per cent yesterday as the poor numbers overshadowed the widely anticipated commencement of the buyback, in…