Shell PLC (LSE:SHEL, NYSE:SHEL) has reported record fourth-quarter profits of US$9.8bn, driven by higher trading from its liquefied natural gas (LNG) operations, and launched a new US$4bn buy-back programme.
Annual earnings doubled to US$39.87bn, which is also a record, as the FTSE 100-listed oil major benefited from soaring energy prices inflamed by Russia's invasion of Ukraine.
The record quarter-four adjusted earnings were 4% higher than quarter three and well above last year’s US$6.4bn, while Shell also reported adjusted EPS of US$1.39 compared to US$1.30 in quarter three.
Analysts had expected Shell’s chief executive, Wael Sawan, to report adjusted earnings of US$7.97bn for the fourth quarter and US$38.17bn for the year, in his City debut.
A 15% increase in the dividend was announced to US$0.2875 and Shell has embarked on a further US$4bn share buy-back programme which it expects to be completed by the time quarter one results are announced.
Shell said the growth in quarter four mainly reflected higher LNG trading and optimisation results, favourable deferred tax movements, which were partly offset by lower realised oil and gas prices, and higher operating expenses.
Fourth-quarter 2022 income also included net gains of US$4.2bn due to the fair value accounting of commodity derivatives, partly offset by charges of US$1.9bn related to the EU solidarity contribution and the UK Energy Profits Levy, and impairment charges of US$0.7bn.
Cash flow from operating activities for the fourth quarter 2022 was US$22.4bn and included working capital inflows of US$10.4bn, and tax payments of US$4.4bn.
The working capital inflows were mainly driven by higher initial margin inflows, lower prices on crude inventories, a decrease in accounts receivable, and cash relating to joint ventures, Shell said.