Shell Q1: Earnings Power Shines Despite Revenue Headwinds

Zinger Key Points
  • Shell's Q1 Integrated Gas production rose 10% Q/Q, reaching 992 kboe/d, while Upstream remained steady at 1,872 kboe/d.
  • Shell announced a share buyback program worth $3.5 billion.

Shell plc SHEL shares are trading higher after its first-quarter FY24 results.

Revenue of $72.48 billion missed the consensus of $82.04 billion. Total production at Integrated Gas rose 10% Q/Q to 992 kboe/d, and Upstream remained flat on quarter at 1,872 kboe/d. 

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Meanwhile, sales volumes at Marketing fell to 2,763 thousand b/d from 2,997 thousand b/d the previous quarter, and Refinery processing intake at Chemical & Products rose 9% Q/Q to 1,430 Refinery kb/d.

Adjusted earnings increased 6% Q/Q to $7.73 billion and Adj. EBITDA rose 15% Q/Q to $18.71 billion, reflecting lower operating expenses, higher margins from crude and oil products trading and optimisation, and growth in refining margins.

Net income attributable to Shell plc shareholders declined to $7.36 billion from $8.71 billion a year ago. Adjusted earnings per ADS for the quarter was $2.40, above the consensus of $1.86.

Cash flow from operating activities stood at $13.3 billion in the quarter. At the end of the first quarter, net debt was $40.5 billion, with a gearing ratio of 17.7%. 

Dividend Boost: Shell disclosed a first-quarter dividend per share of $0.344, payable on June 24 to shareholders of record as of May 17.

Buyback: The company announced a share buyback program worth $3.5 billion for a contract term of around three months.

In the first quarter, total shareholder distributions stood at $5.0 billion, comprising share repurchases of $2.8 billion and cash dividends of $2.2 billion.

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FY24 Outlook Reiterated: The company expects cash capital expenditure of $22 billion – $25 billion.

It expects second-quarter production at Integrated Gas of approximately 920 – 980 thousand boe/d and Upstream of about 1,630 – 1,830 thousand boe/d.

The company projects Marketing sales volumes of approximately 2,700 – 3,200 thousand b/d

Shell stock has gained more than 22% in the last 12 months. Investors can gain exposure to the stock via Direxion Hydrogen ETF HJEN and VanEck Natural Resources ETF HAP.

Also ReadShell Defends Climate Goals, Rejects Shareholder Resolution As Damaging

Price Action: SHEL shares are up 2.34% Y/Y at $72.61 at the last check Thursday.

Photo via Wikimedia Commons

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