Shell posts $10 billion profit, lifted by fuel trading

By Ron Bousso and Shadia Nasralla

LONDON (Reuters) – Shell (LON:) on Thursday posted first-quarter net profit of $9.65 billion, topping analysts’ forecasts, as strong earnings from fuel trading and higher liquefied (LNG) sales offset cooling energy prices.

The stronger-than-expected profits followed a string of forecast-beating results from rivals including BP (NYSE:) and Exxon Mobil (NYSE:) as the sector continues to benefit from strong demand and price volatility. Norwegian rival Equinor on Thursday also posted higher-than-expected quarterly profits.

Lower natural gas prices in the quarter weighed on Shell’s giant integrated gas business, with profits slumping 18% to $4.9 billion. But this was broadly offset by a 139% jump in profits to $1.8 billion in its chemicals and refined products unit.

Shell, the world’s top LNG trader, said LNG production rose in the quarter thanks to higher uptime at its giant Prelude floating facility off the coast of Australia.

GRAPHIC – Shell’s LNG production and sales

PROFITS BEAT

Shell reported adjusted earnings of $9.65 billion in the first quarter, exceeding a company-provided analyst forecast of $8 billion. The company’s shares rose 2.5% in early London trading.

    That compared with earnings of $9.1 billion a year earlier and $9.8 billion in the fourth quarter of 2022, when Shell reported a record annual profit of $40 billion. 

Shell kept its dividend unchanged at $0.2875 per share and also kept the rate of its share repurchase programme stable at $4 billion over the next three months. It bought back $19 billion in shares in the year to February 2023, nearly double the total in pre-pandemic 2019.

The British company maintained its 2023 capital spending plans unchanged in a range between $23 and $27 billion.

Shell Chief Executive Officer Wael Sawan has introduced a new management structure since taking office in January, including placing its renewables and low-carbon operations under the downstream division.

GRAPHIC – Shell’s quarterly profits

GRAPHIC – Shell’s cash generation