Shell Reports Strong 1Q Results

Shell Reports Strong 1Q Results
Shell reported 'strong results in volatile times'.

Shell reported “strong results in volatile times” in its first quarter 2022 results statement.

The company posted adjusted earnings of $9.1 billion in 1Q 2022, compared to $3.2 billion during the same period last year and $6.3 billion during 4Q 2021, and income attributable to Shell shareholders of $7.1 billion, compared to $5.6 billion in 1Q 2021 and $11.4 billion in 4Q 2021. Adjusted EBITDA was $19 billion in 1Q 2022, up from the $11.5 billion posted during 1Q 2021 and the $16.3 billion posted during 4Q 2021. 

Cash flow from operating activities hit $14.8 billion during this year’s first quarter, compared to $8.2 billion in 1Q 2021 and $8.1 billion in 4Q 2021, free cash flow came in at $10.5 billion, compared to $7.7 billion in 1Q 2021 and $10.7 billion in 4Q 2021, and net debt dropped to $48.4 billion, compared to $71.2 billion in 1Q 2021 and $52.5 billion in 4Q 2021.

Income attributable to Shell shareholders, adjusted earnings, and adjusted EBITDA, compared with 4Q 2021, mainly reflected higher realized prices, higher trading contributions across businesses, and lower operating expenses and tax, partly offset by lower volumes, Shell outlined in its results. Income attributable to Shell shareholders also reflected post-tax charges of $3.9 billion related to the phased withdrawal from Russian oil and gas activities, Shell highlighted.

Cash flow from operating activities reflected net favorable derivatives movements of $2.2 billion, according to Shell, which pointed out that the company’s net debt movement was mainly driven by free cash flow and partly offset by dividends and share buybacks.

Shell also revealed in its latest results that, of an $8.5 billion share buyback program announced for the first half of 2022, $4 billion had been completed as of May 4. The remaining $4.5 billion of share buybacks pursuant to the program are expected to be completed prior to the announcement of the second quarter 2022 results, Shell revealed.

“Generating value through strong earnings and cash flow, coupled with maintaining a healthy balance sheet and continuing the disciplined delivery of our strategy, are crucial for Shell to play a leading role in the energy transition,” Shell CEO Ben van Beurden said in the company’s latest results statement.

“This allows us to support our customers as they shift to cleaner energy. It’s also the best way for us to contribute to the security of energy supplies. Today’s results, the progress we are making with our $8.5 billion share buyback program and the reduction of our net debt to $48.5 billion all show we remain on track, and give us the confidence to plan future shareholder distributions and disciplined investments that will accelerate our strategy,” Beurden added in the statement.

Commenting on Ukraine, Beurden said the war “is first and foremost a human tragedy, but it has also caused significant disruption to global energy markets and has shown that secure, reliable and affordable energy simply cannot be taken for granted”.

“The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide. We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can,” the Shell CEO added.

In a video posted on Shell’s website, the company’s chief financial officer, Sinead Gorman, described Shell’s 1Q 2022 performance as “a strong quarter for Shell amid volatile geopolitical and macro conditions”.

“These results reflect the benefits of the strong integration of trading and optimization activities across all of our businesses, including renewables and energy solutions, or RES,” Gorman added in the video.

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