Shell Q4 profits miss expectations but dividend hiked

(Sharecast News) - Oil giant Shell lifted its dividend on Thursday even as it posted a bigger-than-expected drop in fourth-quarter profits. Fourth-quarter adjusted earnings fell to $3.66bn from $6bn in the third quarter. This reflects lower prices and margins, higher exploration well write-offs, and the non-cash impact of expiring hedging contracts on LNG trading and optimisation results, Shell said. Analysts were expecting third-quarter adjusted earnings of $4.3bn.

For the full year, adjusted earnings fell to $23.7bn from $28.3bn in 2023.

Still, free cash flow for the year came in at $39.5bn, up from $36.5bn and Shell upped its dividend by 4% for the fourth quarter to $0.358. It also kicked off a $3.5bn share buyback programme, expected to be completed by Q1 2025 results announcement.

Chief executive Wael Sawan said: "2024 was another year of strong financial performance across Shell. Despite the lower earnings this quarter, cash delivery remained solid and we generated free cash flow of $40 billion across the year, higher than 2023, in a lower price environment.

"Our continued focus on simplification helped to deliver over $3 billion in structural cost reductions since 2022, meeting our target ahead of schedule, whilst also making significant progress against all our other financial targets.

"Today, we announce a 4% increase in our dividends and another $3.5 billion buyback programme, making this the 13th consecutive quarter of at least $3 billion of buybacks, all whilst further strengthening our balance sheet this year to position us well for the future."