Shell announces lower earnings than expected

On Thursday, Shell recorded Q4 profit of $474 million. The London-based corporation reported a per-share profit of 14 cents. Adjusted for nonrecurring charges, earnings per share were $2.22. The results exceeded Wall Street’s expectations. Average forecast was for earnings of $1.94 per share.

The oil and gas company generated $80.13 billion in revenue over the time. The corporation made $19.36 billion in profit this year, or $5.70 per share. Revenue was reported as $323.18 billion. The company increased its dividend by 4%, and launched a $3.5 billion repurchase programme over the next three months.

Shell also announced decreased annual profits in 2023, falling from $39.9 billion in 2022, the company’s best earnings in its 115-year existence. The spike in oil and gas prices following Russia’s invasion of Ukraine resulted in unprecedented earnings for energy companies.

Household bills have decreased since 2022, but remain expensive. The prices of petrol, electricity, petrol and diesel began to rise once the Covid lockdowns ended, but they skyrocketed in March 2022 due to supply problems. Brent crude oil hit around $128 per barrel following the invasion, but has subsequently dropped to around $80. Petrol prices also soared, but have since fallen.
The 2022 price spike resulted in record profits for all energy firms, including Shell and BP. In response, the government imposed the Energy Profits Levy, a windfall tax on corporations’ ‘exceptional’ earnings from their UK activities, to help fund a scheme to subsidise gas and electricity costs.

Shell reported it paid £178 million in UK windfall tax in 2022 and £1.1 billion in total tax in the UK in 2023, with £240 million payable under the Energy Profits Levy.

Shell returned $23 billion to shareholders in 2023 and is now increasing its dividend by 4% while launching a $3.5 billion share repurchase programme over the next three months. Profits fell last year due to lower oil and gas prices and decreased volumes.