Earnings Drop Amid Softer Market Conditions

Shell reported a significant 39% drop in fourth-quarter profits, with adjusted earnings declining to $3.66 billion compared to the same period last year. The energy giant attributed the slump to weaker oil and gas prices, shrinking refining margins, and reduced trading profits.

Capital Returns Remain Steady

Despite the decline in profits, Shell announced a new $3.5 billion share buyback program, reaffirming its commitment to shareholder returns. This follows the completion of a similar $3.5 billion buyback in the previous quarter. Cash dividends for the quarter were maintained at $0.358 per share.

Year-End Financial Performance

For the full year, Shell posted a profit of $23.7 billion, down from $28.25 billion in 2023. The drop reflects a softer energy market, lower LNG trading profits, and reduced marketing volumes.

Cash Flow and Rising Net Debt

Operating cash flow for the quarter reached $13.2 billion, supported by $2.4 billion in working capital inflows. However, increased tax payments and regulatory costs offset this gain. Shell’s net debt rose to $38.8 billion from $35.2 billion in the previous quarter, driven by share buybacks, dividends, and lease expenses.

Outlook for 2024 and Beyond

Looking ahead, Shell plans to maintain disciplined spending with $21 billion allocated for capital expenditures in 2024. The company hinted at potential spending cuts in 2025, with further updates expected during its Capital Markets Day.