Shell PLC (LSE:SHEL, NYSE:SHEL) could provide an insight into an ongoing strategic review of its home energy and broadband wings when it posts final results.
A review which could ultimately see the subsidiaries wound down, affecting 2mln customers, but barely touching the sides of the wider group's profits and cashflow.
Following the promotion to the role of group chief executive of Wael Sawan from its renewables arm, the results could also clarify Shell’s current stance on its transition to greener fuels, especially with extra pressure from activist actors.
Updating in early January, Shell said it expected fourth-quarter trading and optimisation to be “significantly higher” than the previous quarter - raising hopes among investors for more bumper returns.
Plans to increase dividends by 15% and repurchase more than US$18bln of shares are not nearly enough to get the share price above rivals, one analyst recently said.
City analysts on average forecast full-year pre-tax earnings to be around US$83.7bn, up from US$55bn last year. Capital investment is expected to grow too, from US19bn in 2021 to US$23bn last year.
Windfall tax payments in Europe and the UK are anticipated to be around US$2bn, following introduction of the levy in the wake of the Ukraine war, which saw wholesale fuel prices skyrocket.
“It would appear to be the first time in five years that Shell has paid tax on its UK operations,” said Hargreaves Lansdown analyst Susannah Streeter, given a series of tax breaks offered to North Sea companies.
“Shell’s profits won’t be pouring in at quite the same bumper rate,” Streeter added, with oil prices having fallen to around US$85 a barrel, down from US$120 in the summer.
For its integrated gas division, Streeter suggested profits will be “significantly higher” for the end of the year though, as Shell overcomes “hiccups,” including outages on its Prelude floating liquified natural gas facility.