Shell plc
Shell Plc publishes fourth quarter 2022 press release
London, February 2, 2023
“Our results in Q4 and across the full year demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.
We believe that Shell is well positioned to be the trusted partner through the energy transition. As we continue to put our Powering Progress strategy into action, we will build on our core strengths, further simplify the organisation and focus on performance. We intend to remain disciplined while delivering compelling shareholder returns, as demonstrated by the 15% dividend increase and the $4 billion share buyback programme announced today.”
Shell plc Chief Executive Officer, Wael Sawan
STRONG RESULTS, DISCIPLINED CAPITAL ALLOCATION
- Strong performance in a continuing uncertain economic environment. Q4 2022 Adjusted Earnings of $9.8 billion, with Adjusted EBITDA of $20.6 billion, despite lower oil and gas prices compared with Q3 2022, with higher LNG trading and optimisation results.
- 15% dividend per share increase for the fourth quarter. $4 billion share buybacks announced, expected to be completed by Q1 2023 results announcement.
- 2022 full year shareholder distributions $26 billion. Total distributions in excess of 35% of CFFO for 2022.
- Strengthening the portfolio with the announced acquisition of Nature Energy (Denmark), a renewable natural gas producer, winning the wind tender for Hollandse Kust (west) VI as part of the Ecowende joint venture and further simplifying the portfolio with the merger of Shell Midstream Partners (USA).
- 2023 cash capex outlook: $23 – 27 billion.
| $ million | Adj. Earnings1 | Adj. EBITDA | CFFO | Cash capex | |
| Integrated Gas | 5,968 | 8,332 | 6,409 | 1,527 | |
| Upstream | 3,061 | 9,418 | 7,224 | 1,845 | |
| Marketing | 446 | 1,045 | 1,062 | 1,993 | |
| Mobility | 379 | 815 | 851 | ||
| Lubricants | 79 | 187 | 598 | ||
| Sectors & Decarbonisation | (11) | 42 | 544 | ||
| Chemicals & Products | 744 | 1,574 | 3,119 | 786 | |
| Chemicals | (688) | (525) | 341 | ||
| Products | 1,432 | 2,098 | 445 | ||
| Renewables & Energy Solutions | 293 | 396 | 2,674 | 1,076 | |
| Corporate | (626) | (164) | 1,916 | 91 | |
| Less: Non-controlling interest (NCI) | 73 | ||||
| Shell | Q4 2022 | 9,814 | 20,600 | 22,404 | 7,319 |
| Q3 2022 | 9,454 | 21,512 | 12,539 | 5,426 | |
| FY 2022 | 39,870 | 84,289 | 68,413 | 24,833 | |
| FY 2021 | 19,289 | 55,004 | 45,104 | 19,698 |
1 Income/(loss) attributable to shareholders for Q4 2022 is $10.4 billion. Reconciliation of non-GAAP measures can be found in the unaudited results, available on www.shell.com/investors.
- CFFO of $22.4 billion for Q4 2022 benefited from a working capital inflow of $10.4 billion. The working capital inflow reflects the impact of lower oil and gas prices, active management of initial margin positions, decrease in accounts receivable and cash relating to joint ventures. Tax paid was higher at $4.4 billion in Q4 2022. As a result, net debt decreased by ~$3.5 billion (~7%) compared with last quarter, to $44.8 billion in Q4 2022.
| $ billion | Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 |
| Divestment proceeds | 9.1 | 0.7 | 0.8 | 0.3 | 0.2 |
| Free cash flow | 10.7 | 10.5 | 12.4 | 7.5 | 15.5 |
| Net debt | 52.6 | 48.5 | 46.4 | 48.3 | 44.8 |
Q4 2022 FINANCIAL PERFORMANCE DRIVERS
INTEGRATED GAS
| Key data | Q3 2022 | Q4 2022 | Q1 2023 outlook |
| Realised liquids price ($/bbl) | 76.75 | 69.62 | — |
| Realised gas price ($/mscf) | 13.18 | 12.31 | — |
| Production (kboe/d) | 924 | 917 | 910 – 970 |
| LNG liquefaction volumes (MT) | 7.24 | 6.78 | 6.6 – 7.2 |
| LNG sales volumes (MT) | 15.66 | 16.82 | — |
- Lower liquefaction volumes mainly reflect longer-than-expected maintenance at Prelude and operational issues at QGC in Australia.
- Adjusted Earnings were higher than in Q3 2022 due to higher trading and optimisation results coupled with favourable movements in deferred tax positions.
- Trading and optimisation results driven by seasonality combined with capturing unique optimisation opportunities generated through the large scale and scope of our LNG trading portfolio.
UPSTREAM
| Key data | Q3 2022 | Q4 2022 | Q1 2023 outlook |
| Realised liquids price ($/bbl) | 93.02 | 82.42 | — |
| Realised gas price ($/mscf) | 18.38 | 12.78 | — |
| Liquids production (kboe/d) | 1,273 | 1,331 | — |
| Gas production (mscf/d) | 2,995 | 3,067 | — |
| Total production (kboe/d) | 1,789 | 1,859 | 1,750 – 1,950 |
- Q4 2022 production was higher than in Q3 2022, mainly driven by lower scheduled maintenance and lower unscheduled deferment.
- Adjusted Earnings impacted by a decline in oil and gas prices. Q3 2022 earnings benefited from one-off non-cash provision releases and gains related to storage transfer effects in a joint venture.
MARKETING
| Key data | Q3 2022 | Q4 2022 | Q1 2023 outlook |
| Marketing sales volumes (kb/d) | 2,581 | 2,543 | 2,150 – 2,650 |
| Mobility (kb/d) | 1,686 | 1,692 | — |
| Lubricants (kb/d) | 80 | 74 | — |
| Sectors & Decarbonisation (kb/d) | 815 | 777 | — |
- Marketing earnings were lower than in Q3 2022, due to the seasonal impact of lower volumes and lower margins in Mobility, as well as higher opex.
CHEMICALS & PRODUCTS
| Key data | Q3 2022 | Q4 2022 | Q1 2023 outlook |
| Refining & Trading sales volumes (kb/d) | 1,803 | 1,800 | — |
| Chemicals sales volumes (kT) | 2,879 | 3,017 | — |
| Refinery utilisation** (%) | 88 | 90 | 87 – 95 |
| Chemicals manufacturing plant utilisation** (%) | 76 | 75 | 68 – 76 |
| Global indicative refining margin ($/bbl) | 15 | 19 | — |
| Global indicative chemical margin ($/t) | (27) | 37 | — |
* Products covers refining and trading
- Lower trading and optimisation margins were offset by higher refining margins.
- Higher opex and depreciation includes the impact of commencement of operations at Shell Polymers Monaca (the Pennsylvania project) partly offset by favourable movements in deferred tax positions.
**With effect from Q2 2022, the methodology applied in calculating both Chemicals manufacturing plant utilisation and Refinery utilisation has been revised. For details, see the Quarterly Results Announcement.
RENEWABLES & ENERGY SOLUTIONS
| Key data | Q3 2022 | Q4 2022 |
| Adj. Earnings ($ billion)* | 0.4 | 0.3 |
| Adj. EBITDA ($ billion) | 0.5 | 0.4 |
| External power sales (TWh) | 67 | 66 |
| Sales of natural gas to end-use customers (TWh) | 157 | 241 |
| Renewables power generation capacity** | 5.2 | 6.4 |
| in operation (GW) | 2.2 | 2.2 |
| under construction and/or committed for sale (GW) | 3.0 | 4.2 |
*Segment earnings for Q4 2022 are $4.7 billion. Reconciliation of non-GAAP measures can be found in the unaudited results, available on www.shell.com/investors.
**Excluding Shell’s equity share of associates where information cannot be obtained and prior period comparatives have been revised accordingly
- Q4 2022 Adjusted Earnings resulted from strong trading and optimisation margins for gas and power mainly driven by European and Australian markets as significant price volatility continued. This was partly offset by higher operating and development costs.
- Won bid with Eneco to jointly develop 760 MW installed capacity offshore wind power project in the Netherlands at Hollandse Kust (west) VI.
- Completed acquisition of Daystar Power Group, a provider of Solar-as-a-Service and Power-as-a-Service solutions to commercial and industrial customers in West Africa.
- Acquired 50% in Kondinin Energy Pty Ltd which holds land access for a wind, solar and battery energy storage development in Western Australia.
- Acquired Green Tie Capital’s platform with ten medium mature solar energy projects across Spain and potential for 2 GW of solar power generation capacity.
The Renewables and Energy Solutions segment includes Shell’s Integrated Power activities, comprising electricity generation, marketing, trading and optimisation of power and pipeline gas, and digitally enabled customer solutions. The segment also includes production and marketing of hydrogen, development of commercial carbon capture storage hubs, trading of carbon credits and investment in nature-based projects that avoid or reduce carbon.
CORPORATE
| Key data | Q3 2022 | Q4 2022 | Q1 2023 outlook |
| Adjusted Earnings ($ million) | (571) | (626) | (600) – (400) |
- The Adjusted Earnings outlook is a net expense of $1,700 – 2,300 million for the full year 2023. This excludes the impact of currency exchange effects.
UPCOMING INVESTOR EVENTS
| 16 February 2023 | Shell LNG Outlook 2023 |
| 22 March 2023 | Annual ESG Update |
| 4 May 2023 | First quarter 2023 results and dividends |
| 23 May 2023 | Annual General Meeting |
| 14 June 2023 | Capital Markets Day 2023 |
| 27 July 2023 | Second quarter 2023 results and dividends |
| 2 November 2023 | Third quarter 2023 results and dividends |
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