02 November 2023
If you are covering Shell’s recent results, please see the following comment from Jamie Maddock, energy research analyst at Quilter Cheviot:
"Shell's third-quarter performance for 2023 showed consistency with market expectations, with a solid cash flow that keeps dividends secure. In a move likely to please investors, Shell increased its share buyback program, signalling confidence in its financial health. The dividend remains stable, yet the company has again slightly reduced its anticipated spending, demonstrating a cautious approach in an unpredictable market.
"Shell earned $6.2 billion, down 34% from the previous year but right on target with what was predicted with its oil and gas production and chemicals divisions offsetting weakness elsewhere in the business.
"Looking to the future, Shell seems to be keeping a tight rein on project spending, despite fluctuating oil prices. This conservative spending means more cash in hand, which could be used to increase dividends and fund more share buybacks. With a strategy that could yield a total capital return of about 12% to shareholders.
"From an environmental standpoint, Shell's biggest hurdle is the transition to a net-zero carbon future. Shell has committed to a net-zero emissions goal by 2050, including both its operations and the use of its products. By 2030, Shell aims to halve its own carbon emissions. The company plans to allocate a significant portion of its investment to renewable energy and low-carbon projects, focusing on increasing its energy trading and customer base rather than setting specific targets for power generation."
