Home Estate Planning Shell beats expectations on profits and woos investors with £2.7bn share buyback

Shell beats expectations on profits and woos investors with £2.7bn share buyback

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Oil supermajor Shell’s profits have beaten analyst consensus despite falling 29 per cent as asset write-downs and a slump in oil prices dampened investor returns.

This morning the company reported both its Q4 2023 results and the full-year numbers.

Adjusted earnings came in at $28.3bn for the full-year 2023 period, against $39.9bn in 2022, while for the fourth quarter the firm collected $7.3bn against $9.8bn a year prior.

The oil giant had been scoped by analysts to hit $27.5bn for the year.

Cash flow from operations (CFFO) was $12.6bn for the fourth quarter; and the total CFFO amounted to $54.2bn in 2023, the second highest year in the company’s history.

Total shareholder distributions in 2023 amounted to $23bn, which is 42 per cent of CFFO but down $3bn on 2022 levels.

Total shareholder distributions in the fourth quarter amounted to $6.2bn, up from $4.9bn in the corresponding period last year, and comprising repurchases of shares of $4.0bn and cash dividends paid to Shell plc shareholders of $2.2bn.

Concerning buybacks, the firm announced a $3.5bn programme, which is expected to be completed by its first-quarter 2024 results — due out by early May — and an XX per cent dividend per share increase for the fourth quarter.

The company also announced it is increasing its dividend by 4 per cent.

The 2024 cash capital expenditure outlook range remains $22-25bn, as announced at the firm’s Capital Markets Day last year.

The company first revealed the non-cash post-tax impairment for Q4 in December last year, driven by macroeconomic conditions as well as portfolio choices, including the Singapore Chemicals & Products assets.

Earnings from the firm’s Renewable and Energy Solutions division fell drastically over 2023 against 2022 levels, with adjusted earnings falling 60 per cent and adjusted EBITDA dropping 43 per cent.

Owing to the firm’s decision last year to axe the media Q&A aspect of their results reporting, journalists will not be able to put additional questions to Shell’s senior leadership team.

Shell Chief Executive Officer Wael Sawan said:

“Shell delivered another quarter of strong performance, concluding a year in which we made good progress across the targets outlined at our Capital Markets Day. As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions.”

Shell’s share price was up one per cent on the news as of 7:45 this morning.

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