Shell Reports Weaker Earnings, Maintains Buybacks
Shell Plc's profit for the fourth quarter of 2024 fell short of expectations, as weaker trading and lower oil prices impacted the company. However, Shell maintained its share buyback program at a pace of $3.5 billion per quarter and raised its dividend by 4%.
CEO Wael Sawan attributed the underperformance to the expiry of liquefied natural gas hedging contracts, as well as weaker oil trading. Despite the profit miss, Shell generated strong cash flow, indicating a "tremendous year," Sawan said.
Adjusted net income for the quarter was $3.66 billion, down from $7.31 billion a year earlier. The miss reflected lower margins from crude and oil products trading, weaker liquefied natural gas trading, and higher exploration write-offs.
Shell's cash flow from operations was $13.16 billion for the period, exceeding expectations. The company has now completed 13 consecutive quarters of buybacks of at least $3 billion.
Net debt rose to $38.81 billion, up from $35.23 billion in the prior period. However, capital expenditure came in at $21.08 billion in 2024, below the company's prediction of $22 billion.
Shell intends to maintain cost discipline to ensure resilience amidst ongoing uncertainty and volatility in the industry.