Shell ends 2021 with high performance, dividend hike, buyback again According to Reuters

© Reuters. FILE PHOTO: General view of a Shell gas station sign, in Milton Keynes, England, January 5, 2022. REUTERS/Andrew Boyers

By Ron Bousso

LONDON (Reuters) – Shell (LON:) once again raised its dividend and bought back shares on Thursday after fourth-quarter profit hit an eight-year high, boosted by higher oil and gas prices and strong gas business.

These strong results represent a strong year of recovery for Shell and the oil and gas sector following a drop in energy demand and prices in 2020 due to the Coronavirus outbreak.

Shell shares were up 1.2% at 1015 GMT, compared with a 0.1% drop in the broader European energy index.

Shell, which moved its headquarters from The Hague to London last month, said it expected to raise its dividend by 4% in the first quarter of 2022 to $0.25 per share. This will be the fourth dividend hike since Shell cut its dividend in early 2020 for the first time since the 1940s.

The company also announced it will buy back $8.5 billion worth of stock in the first half of 2022, including $5.5 billion from the sale of its Permian shale assets in the United States.

That compares with share buybacks totaling $3.5 billion in 2021.

“The year 2021 is an important year for Shell,” Chief Executive Officer Ben van Beurden said in a statement.

Electricity and natural gas prices around the world have skyrocketed since mid-last year due to tight gas supplies and higher demand as economies recover from the COVID-19 pandemic.

European benchmark gas prices and Asian LNG prices hit all-time highs in the fourth quarter.

Shell, the largest liquefied natural gas (LNG) trader, said its integrated gas earnings were driven by “significantly higher” profits from its business.

The transaction helped offset a decline of 11% in LNG sales and 7% in LNG production in 2021 due to plant maintenance and unplanned downtime, including at the Prelude floating LNG plant. top in Australia.

Van Beurden told reporters that Prelude will be shut down in the first three months of 2022.

Van Beurden also said that Shell would intervene to help supply gas to Europe in the event of a Russian disruption.

IMAGE – Shell’s profits

America’s Rivals Exxon Mobil (NYSE:) on Tuesday reported its biggest profit in seven years and said it plans to increase domestic production by 25% this year. Chevron (NYSE:) earnings missed estimates.

BP (NYSE:), TotalEnergies and Equinor report results next week.


Shell earlier this month officially removed “Royal Dutch” from its name and merged its duly listed shares after moving its headquarters from The Hague to London as part of a simple effort. structure and taxation, which van Beurden said will help the company plan to grow its low-carbon business.

Adjusted earnings for the fourth quarter of 2021 rose 55% from the previous quarter to $6.4 billion, well above the average analyst forecast provided by the company for a profit of 5.2 billion. dollars. That compares with earnings of $393 million a year earlier.

For the year, Shell’s adjusted earnings grew to $19.3 billion, from $4.85 billion in 2020.

“Net income surpassed consensus expectations by 22% and net debt fell sharply. In addition, Shell announced a $8.5 billion share buyback program for the first half of the year, well ahead of expectations. of the market”. Morgan Stanley (NYSE:) analyst Martijn Rats said.

“We expect these results to be supportive for stocks.”

The energy company said it planned to spend this year at a lower $23-27 billion after spending $20 billion in 2021.

Net debt dropped sharply throughout the year to $52.55 billion from $75.4 billion at the end of 2020. The debt-to-equity ratio, aka Shell, fell to 23.1% from 32.2% compared with the same period.

Shell’s cash revenue has grown by a third to $45 billion in 2021 as global economic activity recovers from the pandemic plunge and higher oil and gas prices.

IMAGE – Shell’s annual profit

IMAGE – Shell’s Dividend

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