5th May 2022 09:33
(Alliance News) - Shell PLC on Thursday reported a surge in earnings in the first quarter of 2022 as the firm benefitted from soaring energy prices, despite seeing a nearly USD4 billion charge from exiting Russia.
Shares in the oil major were 3.1% higher in London at 2,293.50 pence each on Thursday morning, among the best performers in the FTSE 100.
In the three months to March 31, current cost of supply earnings attributable to shareholders - Shell's preferred profit metric - rose to USD5.03 billion from USD4.35 billion in the same period the year prior. Income attributable to shareholders increased to USD7.12 billion from USD5.66 billion.
Shell explained income attributable to shareholders reflected post-tax charges of USD3.9 billion related to the phased withdrawal from Russian oil and gas activities.
Chief Executive Ben van Beurden said: "The war in Ukraine 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 oil major posted adjusted earnings of USD9.1 billion, nearly tripled from USD3.23 billion the year before.
Revenue was up to USD84.20 billion from USD55.67 billion. Cash flow from operating activities surged to USD14.82 billion from USD8.29 billion.
In Shell's Upstream unit, its realised liquids price increased to USD88.63 per barrel from USD73.54 in the fourth quarter, with its Integrated Gas business seeing its realised liquids price rising to USD88.76 per barrel from USD77.20 in the final quarter of 2021.
Turning to returns, Shell raised its first quarter dividend by 47% to USD0.25 per share from USD0.17 a year ago.
The strong results come as calls mount from UK politicians in the opposition Labour and the Liberal Democrats parties for a windfall tax on oil and gas firms to help ease the cost-of-living crisis in the country.
The sector is reaping the benefits of rocketing oil and gas prices, which have been pushed to record levels by Russia's invasion of Ukraine and surging demand as economies emerge from the pandemic.
UK Chancellor Rishi Sunak has so far resisted pressure to make the firms pay more tax, instead looking to companies making big profits to invest the cash back into the UK.
van Beurden added: "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. 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 USD8.5 billion share buyback programme and the reduction of our net debt to USD48.5 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."
On Tuesday, peer BP PLC swung to a first-quarter loss due to its decision to exit from its shareholding in Rosneft in response to Moscow's invasion of Ukraine; however on an underlying basis, the oil major reported a big jump in profit.
For the three months that ended March 31, BP swung to an attributable loss of USD20.38 billion from a USD4.67 billion profit in the first quarter last year. BP said the reported result included pretax adjusted items of USD30.8 billion.
However, on an underlying replacement cost basis, BP reported a profit of USD6.25 billion, up 54% from USD4.07 billion in the fourth quarter of last year and more than doubled from USD2.63 billion a year ago.
By Paul McGowan; [email protected]
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