Shell has reported a strong performance in the fourth quarter of 2023, with adjusted earnings of $7.3 billion and 28.3 billion dollars for the full year, reflecting robust operational performance and strong LNG trading and optimization results.

Strong LNG trading results in the quarter helped offset weaker refining and oil trading results, while chemicals posted a loss of $500 million amid sluggish global economic activity following a blockbuster 2022 fuelled by a surge in energy prices after Russia’s invasion of Ukraine.

“Shell’s LNG division continues to help support cash generation, and the company also appears to have operational momentum,” said RBC Capital Markets analyst Biraj Borkhataria.

Shell reported a robust operational performance, with total cash flow from operations (CFFO) amounting to $54.2 billion in 2023, and a disciplined spending approach reflected in a 2023 cash capital expenditure of $24.4 billion.

‘Our relentless focus on performance, discipline, and simplification allowed us to deliver compelling returns and create more value for our shareholders in 2023,” said Wael Sawan, Shell’s Chief Executive Officer.

The British company increased its dividend by 4% from the previous quarter to $0.344 per share, a 20% increase on an annual basis. It is the seventh increase since its historic dividend cut in the wake of the COVID-19 pandemic.

Shareholder distributions in 2023 reached around $23 billion, over 40% of its cash flow from operations.

Shell’s free cash flow, or excess money after investment, fell to $7 billion in the fourth quarter, the lowest in 2023 and less than half the previous year’s $15.5 billion.

“We continue to progress towards our destination of a net-zero emissions business. Our preliminary results show that we have further reduced our Scope 1 and 2 emissions in 2023. We are only halfway through the timeline to our 2030 target, yet we have already achieved more than 60% of the reductions needed to reach the target,” Sawan said.

Shell enhanced its upstream portfolio, achieving $1 billion in structural cost reductions in 2023 and announcing a 2024 cash capex outlook of $22–25 billion.

Looking ahead to 2024, Shell aims to continue targeting shareholder distributions of 30 to 40% of its cash flow from operations while continuing to focus on delivering more value with fewer emissions.