British oil and gas giant Shell said on Thursday that first-quarter profit fell but beat expectations on a “strong” performance and unveiled another share buyback.
Adjusted earnings fell nearly a fifth to $7.7 billion from a year earlier, but that beat market expectations of $6.5 billion, while cash flow from operating activities came in at $13.3 billion .
Adjusted earnings came in at $9.6 billion a year earlier, when Shell saw a derivatives inflow that was not repeated in the first quarter of 2024 due to lower commodity derivative prices, the company said.
The energy major, which invests heavily in renewables, insisted it remained on track to become a net-zero emissions company by 2050, but its results sparked fresh anger from the green lobby.
Shell also disclosed a new share buyback of $3.5 billion and forecast that capital spending this year would reach between $22 billion and $24 billion, it added in a results statement.
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“Shell achieved another quarter of strong operational and financial performance, demonstrating our continued focus on delivering greater value with fewer emissions,” said CEO Wael Sawan.
“We continue to meet our … targets, giving us the confidence to launch another $3.5 billion repurchase program over the next three months.”
Thursday’s news sent its share price one percent higher in late morning deals on the London Stock Exchange.
Shell added that net profit, or profit after tax, fell about 15 percent to $7.4 billion in the reporting period.
Revenue fell 16 percent to $74.7 billion after a sharp drop in natural gas prices, which had spiked after key producer Russia invaded Ukraine in 2022.
Shell had already warned last month that it expected lower gas sales in the first quarter after a particularly strong performance in the last three months of 2023.
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“Shell has generated another quarter of sensational cash flow,” Derren Nathan, head of equity research at brokerage Hargreaves Lansdown, said in response to the results.
“Higher margins and uptime at its refineries more than offset lower earnings at its legacy and completed natural gas segments.
“Strong cash generation enables Shell to reduce debt, reward shareholders and continue to invest in the business.”
The company, however, has been criticized by climate campaigners for its huge profit from fossil fuels.
“On a day when climate leaders are negotiating in Abu Dhabi how to help the world’s poorest meet the rising costs of climate loss and damage, Shell continues to spend billions flogging the fuels that are driving the crisis,” he said. Charlie Kronick, Senior Climate Officer; consultant to Greenpeace UK.
“With the countries facing the worst impacts of climate change among those least responsible for it, the case for making polluters pay for the damage their industry is causing could not be clearer.”
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A Shell spokesman responded that the company seeks to help the global transition to low-carbon energy.
“We agree that the world needs urgent climate action. Shell is playing an important role in the energy transition by providing the energy needed today while helping to build the low-carbon energy system of the future,” a spokesman told AFP.
“We are investing $10-15 billion between 2023 and the end of 2025 in low-carbon energy solutions, making Shell a major investor in the energy transition.”
Source: AFP