LONDON - Shell posted a fourth-quarter profit that was well ahead of expectations as its natural gas business thrived, lifting the oil major to a record performance in 2022 fuelled by soaring energy prices.
After a bumpy ride earlier in 2023 amid volatile markets, Shell’s integrated gas unit was firing on all cylinders in the final quarter, delivering US$6 billion (S$7.8 billion) of adjusted profit in its best-ever performance. The “scale and scope” of the business that produces and trades liquefied natural gas – a crucial fuel for Europe as Russia squeezed pipeline exports – helped drive this performance, the company said.
Flush with cash, Shell kept up the pace of share buybacks by announcing a further US$4 billion of purchases in the coming months, and went ahead with a planned 15 per cent dividend hike. It is a sign that chief executive Wael Sawan, who took over the top job at the beginning of 2023, will continue to prioritise using Shell’s riches to reward shareholders.
“We intend to remain disciplined while delivering compelling shareholder returns,” Mr Sawan said in a statement on Thursday. “Our results in the fourth quarter and across the full year demonstrate the strength of Shell’s differentiated portfolio.”
Shell’s fourth-quarter adjusted net income of US$9.81 billion was well ahead of the average analyst estimate of US$7.97 billion compiled by the company. It posted a profit of US$39.87 billion for the full year, beating the previous record of US$28.4 billion set in 2008.
The earnings are the latest evidence of a blowout year for Big Oil, with Exxon Mobil also reporting a record annual profit in recent days. The performance has drawn scrutiny from governments around the world, whose populations are struggling with a cost-of-living crisis caused in large part by high oil and gas prices. The companies have been criticised, both for making too much money and for giving so much of it back to shareholders instead of investing more in new energy supplies. BLOOMBERG