Home.forex news reportShell raises dividend despite earnings slump

Shell raises dividend despite earnings slump

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Shell reported lower than expected profits in the final quarter of 2024, blaming write-offs in its oil exploration business, thinner margins and lower oil prices.

The oil major posted adjusted earnings of $3.7bn, a 39 per cent fall from the third quarter and roughly 10 per cent below analysts’ consensus estimates. It also booked $2.2bn of impairment charges and losses on asset sales.

Despite the weaker than expected profits, the group raised its dividend by 4 per cent and said it would maintain its $3.5bn a quarter share buyback programme.

Chief executive Wael Sawan has promised to maintain shareholder returns even as oil prices soften, putting the sector under more pressure. Shell said its net debt had risen by $3.6bn from the previous three months to $38.8bn, partly because of the need to buy back shares and pay dividends, but was down from $43.5bn in the same period in 2023.

Shell’s share price was largely flat in early trading on Thursday. Analysts had already marked down their expectations for the company after a trading update earlier this month.

“Given expectations had fallen following the trading statement, we see these results as largely uneventful,” said Biraj Borkhataria, an analyst at RBC Capital, in a note.

Sawan acknowledged in a video that Shell had seen “some softness in our Q4 earnings” but added that the company was ahead of its cost-cutting targets, having trimmed $3.1bn in costs by the end of 2024, one year ahead of its target of $2bn to $3bn of savings.

The group reported adjusted earnings of $23.7bn for the whole of 2024, 16 per cent lower than in 2023.

Shell plans to update investors on its strategy at a capital markets day in New York on March 25.

Since announcing a 10-quarter “sprint” in June 2023, Sawan has focused on cost-cutting and improving Shell’s operations, without laying out a broader vision for Shell’s future.

But investors are increasingly focused on his next move. Last year, he warned that if the persistent gap between the company’s valuation and its US peers had not narrowed by the end of the sprint, he would consider moving Shell’s listing to New York.

Moving the listing would deal a hammer blow to the London Stock Exchange, which has been struggling to attract and retain high-profile companies.



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