Energy
Thursday, February 1st, 2024 5:48 pm EDT
Key Points
- Financial Performance: Shell beat expectations for full-year profit, reporting adjusted earnings of $28.25 billion for 2023. While this marked a 29% drop compared to the previous year’s highest-ever annual profit of $39.9 billion, it exceeded analyst expectations of $27.5 billion in net profit for the year.
- Dividend Increase and Share Buyback: The British oil giant announced a 4% increase in dividend per share for the fourth quarter and unveiled a $3.5 billion share buyback program. Shell’s decision to return value to shareholders through dividend hikes and share buybacks contributed to a positive market response, with shares rising around 2%.
- Strategic Focus and Balance: Shell’s CEO, Wael Sawan, highlighted the company’s three key areas of focus: strengthening the balance sheet, distributing 42% of overall cash flow from operations ($23 billion) to shareholders, and maintaining a commitment to achieving net-zero emissions by 2050. He emphasized finding a balance between delivering energy security and investing in the energy transition, with $5.6 billion spent on “low-carbon” projects in 2023. Despite geopolitical volatility, Shell’s resilience and strategic approach position it well for ongoing success.
British oil giant Shell exceeded expectations for full-year profit, revealing a 4% increase in its dividend and a $3.5 billion share buyback program. The company reported adjusted earnings of $28.25 billion for the full-year 2023, a 29% drop compared to the previous year’s highest-ever annual profit of $39.9 billion. Despite the decrease, Shell’s full-year net profit surpassed analyst expectations, coming in at $27.5 billion. The strong performance in the final quarter of 2023, with adjusted earnings of $7.31 billion, was attributed to robust liquefied natural gas trading and optimization margins, offsetting weaker oil products trading. Shell announced a 4% increase in the dividend per share for Q4 and a $3.5 billion share buyback program over the next three months. The company’s CEO, Wael Sawan, emphasized their commitment to a net-zero emissions goal by 2050 and mentioned investments of $5.6 billion in low-carbon projects in 2023. Shell’s net debt at the end of the year was $43.5 billion. Despite geopolitical volatility, energy analysts suggest Shell’s resilience may continue in 2024, with U.S. oil giants Exxon Mobil and Chevron, along with European peers BP and TotalEnergies, also set to report earnings. Oil prices were higher, with Brent crude futures trading at $81.07 per barrel, and West Texas Intermediate futures at $76.35 per barrel. Both Brent and WTI contracts experienced a 10% decline in 2023 amid geopolitical tensions and demand concerns.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/01/shell-beats-expectations-for-full-year-2023-profit.html
