Ron Busso
LONDON (Reuters) – Shell reported first-quarter profit of $7.7 billion on Thursday, beating expectations, as disruptions to Red Sea shipping and Russian refining led to higher oil trading and increased liquefied natural gas production.
The company said it will buy back another $3.5 billion of its shares over the next three months, at the same rate as the previous quarter. Dividends remained unchanged.
Shell (LON:) cash flow rose 6% quarter-on-quarter to $13.3 billion, reflecting strong operating performance, particularly in its liquefied natural gas division, which together with trading helped offset lower natural gas prices that weighed on profits Shell (LON:). rivals, including Exxon Mobil (New York Stock Exchange:) and Chevron (NYSE:) last week.
“Shell delivered another quarter of strong operational and financial performance, demonstrating our continued focus on improving efficiency with lower emissions,” said CEO Wael Sawan.
Analysts had expected first-quarter adjusted profit to be $6.46 billion, up from $9.65 billion a year earlier. The company earned $7.3 billion in fourth-quarter 2023, helped by strong LNG trading results.
Shell shares were up 1.7% at 1245 GMT, compared with a 1% fall in the broader European energy index.
Shell’s chemicals and products businesses, including refining and petroleum trading, posted a more than three-fold increase in adjusted profit from the previous quarter to $2.8 billion.
Trade in petroleum products has been boosted by shipping disruptions in the Red Sea, as well as disruptions at Russian refineries due to Ukrainian drone attacks in recent months, Chief Financial Officer Sinead Gorman told reporters.
remove advertising
.
Shell has also scheduled refinery maintenance for the last quarter of 2023, while most of its competitors chose the first quarter of the year, giving Shell an additional advantage in supplying petroleum products such as gasoline and diesel, Gorman said.
“Shell exceeded expectations by a reasonable margin, despite the impact of lower gas prices in the first quarter. numbers,” said Stuart Lamont, investment manager at RBC Brewin Dolphin (OTC:).
STRONG LNG
Shell shares are up about 14% this year, helped by Sawan’s efforts to cut costs and focus the company on its most profitable operations. On Wednesday, Reuters reported that Shell had exited China’s energy market.
In March, Shell weakened its target to cut carbon emissions by 2030 and abandoned the 2035 target, citing expectations of high gas demand and uncertainty in the energy transition, even as it reaffirmed a plan to cut emissions to net zero by 2050 year.
Later this month, shareholders will vote on Shell’s strategy, as well as a shareholder resolution calling on the company to tighten its climate targets.
Profits at Shell’s flagship LNG trading unit were 7% lower than in the previous quarter, when the company had a stunning trading performance, but still beat expectations.
Shell’s LNG production rose 7% in the quarter from the previous three months to 7.58 million tonnes, while sales fell 7% to 16.87 million tonnes. The rise was driven by increased production from the giant Prelude floating LNG plant off the west coast of Australia.
remove advertising
.
The company’s total oil and gas production rose 3% in the quarter to 2.91 million barrels of oil equivalent per day.