Shell has taken lower oil prices in its stride and produced a 4% increase in adjusted EBITDA in Q1 2023 when compared to Q4 2022. Shell’s adjusted earnings of $9.6bn for Q1 2023 were only marginally lower than Q4 2022 and were materially higher than Q1 2022.
Shell first saw the impact of higher oil prices due to Russia’s invasion of Ukraine in Q1 2022 and sparked surging profits throughout last year.
The upstream and integrated gas businesses saw adjusted EBITDA for Q1 2023 fall, but strength in the marketing and products segments helped support earnings. Shell’s renewables segment also gathered momentum, with adjusted EBITDA surging 69% from Q4.
Although lower than Q4, Shell’s cash generation remained robust, with a free cash flow of $9.9bn in the quarter. The oil and gas major announced it would return $4bn to shareholders through share buybacks.
“Despite continuing pressure on the oil price, Shell is still throwing off vast quantities of cash. It’s renewed its efforts to return some of this to shareholders, but there will no doubt be fresh calls to increase contributions to the public coffers,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
“Shell’s also continuing to invest heavily, with capex expected to land between $23bn and $27bn this year. Plans are afoot to reinvigorate the Pierce field in the North Sea which is now contributing to gas supplies after years of only producing oil.”
Shell declared a dividend of 28.75 cents for the quarter – the ex-dividend date is set for 18th May.