Shell investors in line for multibillion-dollar windfall despite weak profits
Shell investors in line for multibillion-dollar windfall despite weak profits
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A 4% dividend increase alongside share buybacks of $3.5bn for last three months of year awaits shareholders. Shell has given its investors a multibillion-dollar windfall despite reporting weaker-than-expected profits of $23.7bn (£19bn) for last year as global oil and gas prices tumbled.
Shareholders of Europe’s biggest oil company are in line for a 4% dividend increase alongside share buybacks of $3.5bn for the last three months of the year. This marks the 13th consecutive quarter in which Shell has given its investors buybacks of more than $3bn, despite falling earnings from its oil and gas.
The company reported adjusted annual earnings of $23.7bn for 2024, narrowly missing the forecasts of City analysts who had expected an annual profit of just over $24bn for the year. This represents a sharp drop from 2023, when its full-year earnings tumbled to $28.25bn from a record high of almost $40bn the year before, when Russia’s invasion of Ukraine roiled global oil and gas markets.
Shell has continued to offer its investors healthy returns despite the steady fall in its annual profits. The company’s chief executive, Wael Sawan, said Shell’s cashflows have remained strong, despite the profit slump, and it had shaved $3bn in costs from the business.
Profits are expected to be lower for all major oil companies because of weaker market prices. Oil and gas prices have drifted lower over the last year despite the war in Ukraine and an escalation of the Gaza conflict. The US benchmark price for gas, known as Henry Hub, averaged $2.33 per million British thermal units (MMBtu) down from $2.57 in 2023 – and well below the $6.50/MMBtu average in 2022 after Russia’s full-scale invasion of Ukraine.
