Shell boosts dividend after $28 billion profit for 2023
Send a link to a friend
[February 01, 2024] By
Ron Bousso
LONDON (Reuters) - Shell on Thursday reported a 2023 profit of $28
billion, a 30% drop from the previous year's record as energy prices and
demand cooled, but still allowing the firm to increase its dividend by
4% and extend share repurchases.
The British company's payouts to shareholders reached around $23 billion
in 2023, over 10% of Shell's market value, highlighting investors' focus
on returns as the sector grapples with an uncertain outlook for fossil
fuels.
Shell's 2023 profits were marked by lower chemicals and refining profit
margins and slower fuel sales amid sluggish global economic activity
following a blockbuster 2022 fuelled by a surge in energy prices after
Russia's invasion of Ukraine.
Shell ended the year on a strong note, posting fourth-quarter adjusted
earnings, its definition of net profit, of $7.3 billion, exceeding
analysts' expectations of $6 billion profit but down from a record $9.8
billion a year earlier.
Strong liquefied natural gas (LNG) trading results in the quarter helped
offset weaker refining and oil trading results, while chemicals posted a
loss of $500 million.
![](http://archives.lincolndailynews.com/2024/Feb/01/images/ads/current/ldn_booksda_CHASSKAREN_010924.png)
Analysts at Bernstein estimated that LNG trading accounted for $3.5
billion of profits, the highest ever.
"As we enter 2024 we are continuing to simplify our organization with a
focus on delivering more value with less emissions," Chief Executive
Officer Wael Sawan said.
Shell's shares were up 2.5% at 0945 GMT. Its shares have outperformed
rivals over the past year, rising by over 8%.
GROWING RETURNS
Shell is the first major energy company to report 2023 full year
results. Exxon Mobil and Chevron will report on Friday, followed by BP
and TotalEnergies next week.
Shell increased its dividend by 4% from the previous quarter to $0.344
per share, a 20% increase on an annual basis. It is the seventh increase
since its historic dividend cut in the wake of the COVID-19 pandemic.
The British company also announced the repurchase of a further $3.5
billion of its shares over the next three months, a similar rate to the
previous three months.
[to top of second column] |
![](../images/020124PIX/busine62.jpg)
A view shows a logo of Shell petrol station in South East London,
Britain, February 2, 2023. REUTERS/May James
![](http://archives.lincolndailynews.com/2024/Feb/01/images/ads/current/graue_preowned_012924.jpg)
Shareholder distributions in 2023 reached around $23 billion, over
40% of its cash flow from operations.
But in a worrying sign for the firm, Shell's free cash flow, or
excess money after investment, fell to $7 billion in the fourth
quarter, the lowest in 2023 and less than half the previous year's
$15.5 billion.
LOWER COSTS
Shell took pretax impairment charges of $5.5 billion, with $2.5
billion due to reducing the value of its chemicals business in
Singapore, $1.2 billion due to revisions of oil and gas operations
in Nigeria, Britain and North America, and $873 million due mostly
to revisions of LNG production estimates in Australia.
Sawan, who took the helm in January 2023, vowed to revamp Shell's
strategy to focus on higher-margin projects, steady oil output and
increase natural gas production.
As part of the strategy, Shell has started company-wide staff
reductions, including in its low-carbon solutions division, in a
drive to save up to $3 billion.
Shell reduced annual costs by $1 billion over the past year, Chief
Financial Officer Sinead Gorman told reporters.
Shell's capital expenditure reached $24.4 billion in 2023 and is
expected to range from $22 billion to $25 billion this year.
It increased its forecast for LNG production volumes for the first
quarter of 2024 following the restart of its giant Prelude floating
LNG facility offshore Australia.
(Reporting by Ron Bousso; Editing by Lincoln Feast, Ros Russell and
Mark Potter)
[© 2024 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2023/Nov/22/images/ads/current/merealty_sda_BASKETBALL_2023.png) |