31 October 2024
If you are covering Shell’s latest financial results, please find below a comment from Maurizio Carulli, energy analyst at Quilter Cheviot:
“Shell’s third quarter results were a strong set of numbers and much better than expectations at virtually every level. There have been a number of headwinds in the sector of late, with lower oil prices and weaker refining margins, so this is an impressive result. Even more strikingly, net debt decreased to $35.2bn in the third quarter from $38.3bn the previous three months, reaching a net debt/equity ratio of 18.5%. The company also announced a further $3.5bn buyback for the final quarter of this year.
“Under the leadership of its CEO, Wael Sawan, the company is continuing to deliver on its strategy of portfolio rationalisation, cost reductions and operational improvements. A strong balance sheet, a sound asset base, both geographically/geologically (e.g. Brazil, Qatar) and segmentally (e.g. Integrated gas) support future cash flow production and dividend payments.
“Additionally, Shell is number one globally in liquified natural gas (LNG), a business it created from scratch since the seventies, with great foresight. LNG is the only segment of the oil and gas industry that is expected to grow substantially over the next decade, even under aggressive energy transition and decarbonisation scenarios. As such, the business has put itself in a strong position to weather any volatility in commodity prices and take advantage of competitor struggles.”
