By Ron Bousso
LONDON (Reuters) – Shell reported adjusted first-quarter profit of $7.7 billion on Thursday, well above expectations, thanks to strong oil trade and higher refining margins.
The oil major also announced it would repurchase an additional $3.5 billion worth of its shares over the next three months, at a similar pace to the previous quarter. Its dividend remained unchanged.
“Shell delivered another quarter of strong operational and financial performance, demonstrating our continued drive to create more value with fewer emissions,” CEO Wael Sawan said in a statement.
Analysts expected adjusted profit of $6.46 billion for the first quarter, up from $9.65 billion a year earlier.
The company had recorded $7.3 billion in the fourth quarter of 2023, driven by strong LNG business results.
Shell shares have gained about 14% this year, buoyed by Sawan’s efforts to cut costs and focus the company on its most profitable operations.
Competitors Exxon Mobil, Chevron and TotalEnergies last week reported lower profits from a year earlier, reflecting a sharp drop in natural gas prices after a warmer-than-usual winter in the Northern Hemisphere. which reduced demand and increased inventories.
WEAKER LNG
Shell’s chemicals and products divisions, which include oil refining and trading, reported adjusted profit more than tripled from the previous quarter, to $2.8 billion, driven by strong gains in the trading and refining.
These results were offset by weaker results from its flagship liquefied natural gas (LNG) trading business compared to the previous quarter as well as unfavorable tax movements, Shell said.
Shell’s LNG production rose in the quarter by 7% from the previous three months to 7.58 million tonnes, while sales fell 7% to 16.87 million tonnes.
The company’s overall oil and gas production increased 3% during the quarter to 2.91 million barrels of oil equivalent per day.
(Reporting by Ron Bousso; editing by David Goodman)
