Shell profits tumble 30%… but  energy giant still rakes in more than £22bn

Shell’s profits tumbled by almost 30 per cent last year – but the energy giant still made more than £22billion.

A sharp drop in oil and gas prices meant earnings fell by almost a third from a record £31.6billion in 2022 to £22.4billion in 2023.

But the oil major still beat analysts’ expectations of £21.2billion for the year as it racked up profits of £60million a day. Its share price rose 2.4 per cent, or 59p, to 2506p yesterday.

Last year’s earnings were the second-highest in Shell’s 116-year history following the peak recorded in 2022 after Russia’s invasion of Ukraine pushed up global oil and gas prices.

Greenpeace activists held a mock ‘profits party’ outside Shell’s London headquarters in protest.

A drop in oil and gas prices meant Shell’s earnings fell by almost a third from £31.6bn in 2022 to £22.4bn in 2023. But the oil major still beat analysts’ expectations of £21.2bn for the year

The FTSE 100 group has also increased its quarterly dividend by 4 per cent to $0.344 per share, which was 20 per cent more than the year before.

It marked the seventh increase since its historic dividend cut in the wake of the pandemic, and total shareholder payouts for 2023 reached £18.2billion.

Shell, which is Europe’s biggest oil and gas company, unveiled plans to hand more cash back to investors this year. The company has a further £2.8billion in share buybacks lined up for this quarter.

Jamie Maddock, an energy analyst at investment management company Quilter Cheviot, said: ‘Much of the fall compared to last year was to be expected, given that the prices of oil and gas have plummeted following Russia’s invasion of Ukraine.

‘But strong results relative to expectations have continued to be driven by the gas divisions.’

He added: ‘Shareholders are being rewarded for Shell’s good relative performance compared to peers.’

Shell was the first major energy company to reveal its full-year results for 2023.

Exxon Mobil and Chevron will report today, followed by BP and Total Energies next week. Shell’s expectation-beating profits will raise further questions over how energy firms approach the transition to net zero.

Last summer, the company axed a pledge to cut oil production every year to 2030.

In contrast, BP’s new boss, Murray Auchincloss, recently doubled down on its green strategy to reduce oil and gas production.

Activist investor Bluebell Capital Partners this week urged BP to scrap the plan and cash in on fossil fuels over fears that it is under-performing compared to rivals such as Shell.

Wael Sawan, Shell’s chief executive, said: ‘As we enter 2024, we are continuing to simplify our organisation with a focus on delivering more value with less emissions.’

Richard Hunter, head of markets at Interactive Investor, said: ‘Shell has once more shown how the sheer scale of its operations allows the group to ride the waves of an economic cycle which can bring major challenges as well as rewards.

‘The company tends to be the preferred choice over BP in terms of the market consensus and currently stands at a “buy”.

‘Indeed, this positive general view is reflective of Shell’s position as an important constituent of many portfolios.’

This post first appeared on Dailymail.co.uk