Shell PLC

Shell PLC (LSE: SHEL) is an FTSE 100 listed energy and petrochemical company. It specializes in the exploration, production, refining, and marketing of oil and natural gas, and the manufacturing and marketing of chemicals. Its segments include Integrated Gas, Upstream, Marketing, Chemicals and Products, Renewable and Energy Solutions, and Corporate.

Q3 and YTD FY24 Financial Results (for the third quarter and nine-month financial results for the period ended 30 September 2024)

• Lower Earnings and Increased Costs in Q3 FY24: In the third quarter of 2024, Shell saw a significant 22% drop in income attributable to shareholders compared to the same quarter in 2023, primarily driven by lower refining margins, lower realized oil prices, and higher operating expenses. However, this was partially offset by favorable tax movements and an increase in Integrated Gas volumes. Despite a higher adjusted EBITDA, Shell reported a net loss of USD 1.3 billion due to identified items, including restructuring charges, impairments, and fair value accounting mismatches related to commodity derivatives..
• Strong Free Cash Flow and Debt Reduction: Shell's free cash flow remained robust in Q3 FY24, reaching USD 10.8 billion, marking a 7% increase compared to Q3 FY23. This was driven by strong cash flow from operating activities and working capital inflows, though partially offset by higher tax payments. As a result, Shell reduced its net debt to USD 35.2 billion from USD 38.3 billion in the previous quarter, resulting in a decrease in gearing from 17.0% to 15.7%. This solid financial performance allowed Shell to continue its shareholder distributions, including USD 3.5 billion in share buybacks..
• Resilient Performance in Integrated Gas and Upstream: The Integrated Gas segment showed a 7% improvement in earnings compared to Q3 FY23, driven by higher LNG liquefaction volumes, despite unfavorable accounting mismatches. Meanwhile, the Upstream segment saw a 5% increase in segment earnings due to lower well write-offs, favorable tax movements, and improved operating expenses. Both segments continue to benefit from increased natural gas production and ongoing projects, such as new gas fields in Trinidad and Tobago and Australia.
• Challenges in Marketing and Renewables: Shell faced a challenging quarter in its Marketing and Renewables segments, including pausing construction on a biofuels facility in Rotterdam due to market conditions. In the Renewables and Energy Solutions segment, Shell announced plans to acquire a gas-fired power plant in Rhode Island, USA, signaling a shift towards expanding its energy solutions business. However, the overall performance in renewables remains under pressure, as the company focuses on project delivery and future competitiveness in light of current market dynamics.

Share Price Chart

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Shell PLC (LSE: SHEL) was trading at the current market price of GBX 2,433.50 (as of 27 December 2024, 09:00 AM GMT)

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 27 December 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 4: Dividend Yield may vary as per the stock price movement.