Shell hands cash to investors as weaker oil demand hits profits
Shell hands cash to investors as weaker oil demand hits profits
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Shell has announced a dividend hike and another large share buyback programme after weaker oil demand weighed on fourth-quarter profits. It comes at a time when the energy giant is refocusing efforts back in favour of oil and gas production, and away from renewables, under the direction of chief executive Wael Sawan.
Oil and gas production has proved extremely profitable in recent years as geopolitical upheaval and extremely high levels of energy demand have kept prices high. But the FTSE 100 group's adjusted earnings fell by 16 per cent to $23.7billion (£19.1billion) in 2024, on the back of lower prices and refining margins.
Earnings plunged between the third and fourth quarters by 39 per cent to $3.7billion, about 10 per cent below analysts' estimates, as the group declared higher exploration write-offs in its upstream division. Net debts also increased over the period by about $3.7billion to $38.8billion, although they still fell by around $4.7billion during the year.
But Europe's biggest oil company raised its dividend by 4 per cent for the quarter, taking its annual dividend to $1.39 per share, a 7 per cent increase on the previous year. Shell also intends to repurchase another $3.5billion of its shares over the coming three months.
Shell shares were 0.7 per cent higher at £26.13 on Thursday morning and have risen by around 31 per cent over the past five years. Generous: Shell has announced a dividend hike and another large share buyback programme. The group also achieved its target to cut $3billion (£2.4billion) of costs over the year, partly by axing jobs in its chemicals and low-carbon businesses.
