Shell PLC (LSE:SHEL, NYSE:SHEL, EURONEXT:SHELL) will turn over most of its burgeoning profits to a bulked-up share buy-back programme which will now repurchase some US$8.5bn in the first half of 2022.
The oil major reported US$6.4bn of earnings (adjusted EBITDA) for the fourth quarter whilst cash flow (excluding working capital) amounted to some US$55bn over 2021, after raking in US$11.1bn in Q4.
Shell spent US$20bn of capital in 2021 and it expects this coming year’s capex bill will be at the lower end of US$23bn to US$27bn.
Income attributable to Shell shareholders was up 193% to US$20.1bn for 2021 whilst CCS earnings (earnings based on the current cost of supplies), which is Shell’s preferred metric to described its profitability was marked at US$17bn up 186% compared to a US$19.9bn loss for 2020.
In 2021, the company paid down debt some US$23bn of debt to reduce its net debt pile to US$52.6bn, with gearing marked at 23.1%.
Shell bought US$3.5bn worth of Shell shares through last year’s buy-back programme, and, following its recent reorganisation – which included the name change to drop ‘Royal Dutch’ and the redomicile to ‘leave’ the Netherlands – the oil major plans to more than double buy-backs up to US$8.5bn.
The dividend is nudged just 4% higher, with the Q1 interim payment set at US$0.25 per share.
"2021 was a momentous year for Shell,” said chief executive Ben van Beurden.
“We launched our Powering Progress strategy and simplified our share structure and organisation. Progress made in 2021 will enable us to be bolder and move faster.”
He added: “We delivered very strong financial performance in 2021, and our financial strength and discipline underpin the transformation of our company.”
Talking strategy and transition, van Beurden meanwhile said “We have a compelling strategy, with customers at its core.
“We have ambitious plans to generate shareholder value, to decarbonise our products and to provide energy to our customers while respecting nature.”
Richard Hunter, head of Markets at Interactive Investor, in a note, described the results as a “return to form”.
“The fourth quarter performance made a notable contribution to what has turned out to be a bumper year as a whole,” the analyst said.
“The combination of share listings and the effective move back to the UK have been part of a pivotal year for Shell.
“The company believes that the new structure will both simplify operations as well as enabling a more nimble approach to the years ahead. This comes at a time when the eyes of the world are on the oil majors, with ever-mounting pressure to accelerate the move to renewable energies.”