02 February 2023
If you are covering Shell’s Q4 results, please see the following comment from Jamie Maddock, equity research analyst at Quilter Cheviot:
"As largely expected, Shell has reached new heights, reporting a huge $39.9bn (£32.2bn) in adjusted earnings for 2022, marking its highest profits in 115 years of history. These results represent the new CEO Wael Sawan’s maiden set and were positively driven by the integrated gas division that was able to use its trading divisions to capitalise on the high, volatile global gas prices.
"As for shareholder returns, the dividend was increased 15%, which was in line with prior guidance and the share buyback program of $4bn per quarter was held unchanged and modestly better than expected.
"Given the short tenure of the new CEO there was no new formal guidance around the composition and importantly the framework of shareholder distributions.
"Part of what is fuelling Shell’s success is the soaring prices of oil and gas prices following the Russian invasion of Ukraine. But this success may come at a cost, as these huge profits pose the argument of further windfall taxes aimed at relieving the cost-of-living pressure of families in the UK. Although household energy bills remain sky high the price of Brent crude oil reached a peak of $120 a barrel in March 2022, prices have since cooled off."
