Shell has released its second quarter results for 2024, recording $7.7 billion in profit exceeding forecasts of $6.46 billion, a figure that pales in comparison to the $9.65 billion reported a year earlier.
“Shell delivered another strong quarter of operational and financial results. We further strengthened our leading LNG portfolio and made good progress across our Capital Markets Day 2023 financial targets, including $1.7 billion of structural cost reductions since 2022,” said CEO Wael Sawan said.
Shell’s cash flow experienced a 6% rise from the preceding quarter, reaching $13.3 billion, a testament to robust operational performance, particularly within the LNG division. This, coupled with trading, helped mitigate the impact of falling natural gas prices.
LNG production for the quarter grew by 7% from the preceding three months to 7.58 million metric tons, while sales decreased by 7% to 16.87 million tons. The increase in output was driven by the Prelude floating LNG facility off the western coast of Australia.
The company’s overall oil and gas production increased by 3% in the quarter to 2.91 million barrels of oil equivalent per day.
The company’s chemicals and products divisions, encompassing refining and oil trading, saw a more than threefold surge in adjusted earnings from the previous quarter, reaching $2.8 billion.
Refined oil product trading received a boost from disruptions in shipping in the Red Sea and outages at Russian refineries due to Ukrainian drone attacks, as explained by finance chief Sinead Gorman.
Shell’s strategic timing of refinery maintenance in the last quarter of 2023, while competitors opted for the first quarter, provided the company with an edge in supplying oil products like gasoline and diesel, Gorman added.
Sawan mentioned that although Shell’s shares are currently trading below their “fair market value,” the London-listed company is not actively considering a switch to a New York listing, a move some other companies have made.
Shell’s shares have reached about 14% this year, buoyed by Sawan’s initiatives to cut costs and concentrate the company on its most profitable operations.
In March, Shell revised its 2030 carbon reduction target and eliminated a 2035 objective, citing anticipated strong gas demand and uncertainties in the energy transition, while reaffirming its commitment to achieving net-zero emissions by 2050.
Looking ahead, shareholders are set to vote on Shell’s strategy later this month, along with a shareholder resolution urging the company to strengthen its climate targets.
The company also plans to repurchase an additional $3.5 billion of its shares over the next three months, maintaining a similar pace to the previous quarter, while keeping its dividend steady.
