Shell plc announce second quarter 2023 results

Shell  reported a 56% fall in second-quarter profit to $5 billion as oil and gas prices and refining profit margins fell

SUMMARY OF UNAUDITED RESULTS
Quarters												$ million																	Half year
Q2 2023			Q1 2023			Q2 2022			%¹																	Reference			2023			2022			%
3,134			8,709			18,040			-64			Income/(loss) attributable to Shell plc shareholders																	11,843			25,156			-53
5,073			9,646			11,472			-47			Adjusted Earnings														A			14,720			20,601			-29
14,435			21,432			23,150			-33			Adjusted EBITDA														A			35,867			42,177			-15
15,130			14,159			18,655			+7			Cash flow from operating activities																	29,289			33,470			-12
(3,015)			(4,238)			(6,207)						Cash flow from investing activities																	(7,253)			(10,481)
12,116			9,921			12,448						Free cash flow														G			22,037			22,989
5,130			6,501			7,024						Cash capital expenditure														C			11,631			12,088
9,653			9,312			9,547			+4			Operating expenses														F			18,964			19,004			—
9,607			9,293			9,270			+3			Underlying operating expenses														F			18,900			18,526			+2
11.6%			17.2%			14.3%						ROACE on a Net income basis														D			11.6%			14.3%
13.4%			15.9%			12.4%						ROACE on an Adjusted Earnings plus Non-controlling interest (NCI) basis														D			13.4%			12.4%
40,310			44,224			46,357						Net debt														E			40,310			46,357
17.3%			18.4%			19.3%						Gearing														E			17.3%			19.3%
2,731			2,902			2,898			-6			Total production available for sale (thousand boe/d)																	2,816			2,930			-4
0.46			1.26			2.42			-63			Basic earnings per share ($)																	1.73			3.34			-48
0.75			1.39			1.54			-46			Adjusted Earnings per share ($)														B			2.15			2.74			-22
0.3310			0.2875			0.2500			+15			Dividend per share ($)																	0.6185			0.5000			+24

1.Q2 on Q1 change

Quarter Analysis1

Income attributable to Shell plc shareholders, compared with the first quarter 2023, mainly reflected lower LNG trading and optimisation results, lower realised oil and gas prices, lower refining margins, and lower volumes.

Second quarter 2023 income attributable to Shell plc shareholders also included net impairment charges and reversals of $1.7 billion. These charges are included in identified items amounting to a net loss of $1.6 billion in the quarter. This compares with identified items in the first quarter 2023 which amounted to a net loss of $0.5 billion.

Adjusted Earnings andAdjusted EBITDA2 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for the above identified items and the cost of supplies adjustment of positive $0.3 billion.

Cash flow from operating activities for the second quarter 2023 was $15.1 billion, and included a working capital inflow of $4.8 billion, and tax payments of $3.8 billion. The working capital inflow mainly reflected lower prices on inventories, initial margin inflow, a decrease in over-the-counter collateral, and other accounts receivable and payable movements.
Cash flow from investing activities for the quarter was an outflow of $3.0 billion, and included capital expenditure of $4.6 billion, net other investing cash inflows of $1.1 billion, and divestment proceeds of $0.5 billion.

Net debt and Gearing: At the end of the second quarter 2023, net debt was $40.3 billion, compared with $44.2 billion at the end of the first quarter 2023. Gearing was 17.3% at the end of the second quarter 2023, compared with 18.4% at the end of the first quarter 2023, mainly driven by net debt reduction.

Shareholder distributions

Total shareholder distributions in the quarter amounted to $5.6 billion comprising repurchases of shares of $3.6 billion and cash dividends paid to Shell plc shareholders of $2.0 billion. Dividends declared to Shell plc shareholders for the second quarter 2023 amount to $0.3310 per share. Shell has now completed the $4 billion of share buybacks announced

SHELL PLC 2nd QUARTER 2023 AND HALF YEAR UNAUDITED RESULTS

in the first quarter 2023 results announcement. Today, Shell announces a share buyback programme of $3 billion which is expected to be completed by the third quarter 2023 results announcement. Subject to Board approval, a share buyback programme of at least $2.5 billion is expected to be announced at the third quarter 2023 results announcement.

Half Year Analysis1

Income attributable to Shell plc shareholders, compared with the first half 2022, reflected lower realised oil and gas prices, lower volumes, and lower refining margins, partly offset by higher Mobility margins.

First half 2023 income attributable to Shell plc shareholders also included net impairment charges and reversals of $2.1 billion which are included in identified items amounting to a net loss of $2.1 billion. This compares with identified items in the first half 2022 which amounted to a net gain of $1.1 billion.

Adjusted Earnings andAdjusted EBITDA2 for the first half 2023 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for identified items and the cost of supplies adjustment of positive $0.8 billion.
Cash flow from operating activities for the first half 2023 was $29.3 billion, and included working capital inflows of $4.1 billion, and tax payments of $6.9 billion.

Cash flow from investing activities for the first half 2023 was an outflow of $7.3 billion and included capital expenditure of $10.8 billion, divestment proceeds of $2.2 billion, and net other investing cash inflows of $1.2 billion.

This announcement, together with supplementary financial and operational disclosure for this quarter, is available at www.shell.com/investors3.

1. All earnings amounts are shown post-tax, unless stated otherwise.
2. Adjusted EBITDA is without taxation.
3. Not incorporated by reference.

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