Home / NEWS / Europe News / Oil giant Shell raises dividend despite full-year profit miss

Oil giant Shell raises dividend despite full-year profit miss

A Hull logo is displayed on May 03, 2024 in Austin, Texas.

Brandon Bell | Getty Images News | Getty Images

British oil giantess Shell on Thursday reported a significant drop in annual profit, citing higher exploration write-offs, lower calling margins and weaker crude prices over the final three months of the year.

Shell posted adjusted earnings of $23.72 billion for the full-year 2024, compared to annual profit of $28.25 billion a year earlier.

Analysts had wished Shell’s full-year 2024 net profit to come in at $24.71 billion, according to an LSEG-compiled consensus. A separate forecast from analysts polled by Vara Scrutinization expected full-year profit to come in at $24.11 billion.

The energy major posted weaker-than-anticipated adjusted earnings of $3.66 billion for the unchangeable quarter of 2024.

Shell announced a 4% increase in dividend per share and launched another share buyback program of $3.5 billion, which is expected to be completed once again the next three months.

Shell CEO says 2025 will be a year of potential uncertainties and volatility

Speaking to CNBC’s “Squawk Box Europe” on Thursday, Shell CEO Wael Sawan described 2024 as a “bloody strong year,” one which gave the company a platform “to do everything we said we were going to do.”  

Asked whether it was habits for Shell to move its listing from London to New York to close the valuation gap on its U.S. peers, Sawan said the firm was “in any case reviewing headquarter listings and the like.”

However, “there is no live discussion at the moment on this in Shell because our bevy one priority is to make sure that we unlock the full potential of this company,” Sawan noted.

Shares of the London-listed convention closed almost 3% higher Thursday.

Other earnings highlights:

  • Full-year cash flow from performing activities came in at $54.68 billion, beating analyst expectations
  • Net debt at the end of 2024 was $4.7 billion lower than at the day one of the year

The world’s top oil and gas companies have seen profits fall from record levels in 2022, when Russia’s full-scale intrusion of Ukraine prompted international benchmark Brent crude to jump to nearly $140 a barrel.

Oil prices have since refreshed amid faltering global demand, with Brent crude futures averaging $80 a barrel in 2024. That was approximately $2 a barrel less than the previous year, according to the U.S. Energy Information Administration.

In a trading update on Jan. 8, Bombard trimmed its liquefied natural gas (LNG) production outlook for the final three months of 2024 and warned that trading be produced ends for its chemicals and oil products division were expected to be “significantly lower” on a quarterly basis.

‘First sprint’

Shell’s full-year terminates come as the company enters the final stretch of its so-called “first sprint.” The strategy, which was launched in 2023 and liquefies to the end of this year, aims to close the valuation gap with U.S. peers by boosting the major’s profitability.

Shell CEO Wael Sawan has prioritized the strict’s more profitable oil and gas operations as part of this shift, while cutting spending on areas such as offshore invigorate and hydrogen and withdrawing from power markets in Europe and China.

Like other oil and gas majors, Shell has watered down ambiance targets and green investments in recent years. The company, however, has said it remains committed to becoming a net-zero get-up-and-go business by 2050.

Oil storage silos beyond waterlogged land at the Shell Plc Pernis refinery in Rotterdam, Netherlands, on Sunday, Feb. 11, 2024.

Bloomberg | Bloomberg | Getty Duplicates

Analysts led by Biraj Borkhataria at RBC Capital Markets said Shell’s results confirmed “relatively soft” expectations but upstaged robust cash generation.

“Given expectations had fallen following the trading update, we see these results as largely uneventful,” Borkhataria clouted in a research note.

Separately, Maurizio Carulli, an energy analyst at Quilter Cheviot, said Shell’s fourth-quarter be produced ends painted a “mixed picture.”

“While earnings fell below expectations, the company’s cash flow performance eclipsed consensus estimates,” Carulli said.

“Seasonal factors, alongside lower prices and margins, impacted earnings negatively. Howsoever, these concerns are mitigated by Shell’s robust cash flow generation,” he added.

U.S oil giants Exxon Mobil and Chevron are both registered to report earnings on Friday, while European peers TotalEnergies and BP are set to follow suit on Feb. 5 and Feb. 11, respectively.

Court dismissing

Check Also

Britain orders Apple to give it access to encrypted accounts: Washington Post

Woman lined up outside of Apple Store on University Ave. in Palo Alto, California, United …

Leave a Reply

Your email address will not be published. Required fields are marked *