2 May 2024
If you are covering Shell’s Q1 2024 results, please find a comment below from Jamie Maddock, energy analyst at Quilter Cheviot:
“Shell handsomely beat profit expectations, driven by its Integrated Gas division that benefited from strong trading and optimisation, as well as well as the fact that its gas field in Australia was operational for a longer period during the quarter. While hard to distinguish just how much Integrated Gas benefited from trading and increased production, if disproportionately, the latter it could lead to improved earnings expectations helping Shell shield itself from the volatile swings in commodity prices.
“The improved earnings translated into similarly improved cash flow that also beat expectations. With cash flow from operations standing at $16.1bn, this more than adequately covers capital spend needs, the large ongoing share buy back and the dividend all while swiftly reducing debt.
“Shell is winning from higher oil prices and has taken the decision to hold back on any increased capital spend, which is anticipated to remain flat through to 2025, irrespective of price. As such, this results in significant excess cash being generated from its operations, and this can amply fund the growing dividend while buying back 6-8% of outstanding shares per year. Shareholders are being well rewarded as Shell takes advantage of higher commodity prices and enhanced operational discipline, in recent years.”
