Shell NYSE: SHEL, the world's fifth-largest oil and gas company, reported Q2 2024 financial results on Aug. 1, 2024. The company has delivered returns above its sector in 2024, with a total return of 13%. The Energy Select Sector SPDR Fund NYSEARCA: XLE has returned 10%. An improved understanding of Shell's business will be provided by examining key sections of the company's annual report, reviewing the latest earnings release, and discussing Shell's capacity to deliver shareholder value. Get Chevron alerts ...

Investment Rating - The report maintains a positive outlook on Shell, with an expectation of strong performance in the upcoming quarters, particularly due to robust growth in upstream and marketing sectors [1][2]. Core Insights - Shell's adjusted net income for Q2 2024 is projected at $6.293 billion, exceeding market expectations of $5.980 billion, driven by strong performance in upstream and marketing divisions [1][2]. - The company has reaffirmed its capital expenditure guidance for FY 2024 at $22-25 billion, slightly below market expectations of $22.8 billion [1]. - A new share buyback program of $3.5 billion has been announced, expected to be completed by Q3 2024 [1]. Summary by Sections Overall Performance - Shell reported an adjusted net income of $6.293 billion for Q2 2024, a 24% increase year-over-year from $5.073 billion in Q2 2023, and a decrease of 19% from $7.734 billion in Q1 2024 [2][3]. - The company's revenue for Q2 2024 was $74.463 billion, showing a 3% quarter-over-quarter increase and no change year-over-year [3]. Upstream Business - The upstream segment's adjusted net income reached $2.336 billion, a 21% increase quarter-over-quarter and a 39% increase year-over-year [2][3]. - Oil and gas production was reported at 1,783 thousand barrels of oil equivalent per day, a 5% decrease from the previous quarter [2]. Marketing Business - The marketing segment achieved an adjusted net income of $1.082 billion, a 39% increase quarter-over-quarter and a 21% increase year-over-year [2][3]. - Sales volume expectations for Q3 2024 remain stable at 2,700-3,200 thousand barrels per day [2]. Chemicals and Products - The chemicals and products segment reported an adjusted net income of $1.085 billion, a 33% decrease quarter-over-quarter due to declining refining margins [2][3]. - Refinery utilization was at 92%, with expectations for Q3 2024 dropping to 83-91% [2]. Renewable Energy and Solutions - The renewable energy and solutions segment reported an adjusted net loss of $187 million, a significant decline attributed to seasonal demand fluctuations [2][3].

Financial Data and Key Metrics Changes - The company reported adjusted earnings of $6.3 billion and generated $13.5 billion of cash flow from operations in Q2 2024, indicating strong operational performance [6] - The company achieved a structural OpEx reduction of $1.7 billion in the first half of the year, contributing to the overall cost reduction target of $2 billion to $3 billion by the end of 2025 [5][6] Business Line Data and Key Metrics Changes - In the Integrated Gas business, the company improved operational performance with high controllable availability from QGC in Australia and increased its LNG portfolio through partnerships and acquisitions [2][6] - The Upstream segment is on track to bring projects online with a total peak production of over 500,000 barrels of oil equivalent per day by 2025, with several projects already started [3][4] - The Chemicals business saw significantly higher utilization at Shell Polymers Monaca, with all three polyethylene trains now fully operational [6] Market Data and Key Metrics Changes - The company is focusing on high-grading its portfolio in the downstream and Renewables and Energy Solutions sectors, with a disciplined approach to capital allocation [4][5] - The company is experiencing improved margins in lubricants and premium fuel growth, reflecting a strategic focus on value [5] Company Strategy and Development Direction - The company aims to generate more value with less emissions, focusing on performance, discipline, and simplification as guiding principles [2][7] - The company is committed to maintaining capital discipline and improving operational performance across all business lines, while also enhancing shareholder returns through share buybacks [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum built over the past year, emphasizing the importance of cultural change and operational excellence [9][10] - The company remains focused on long-term growth opportunities in biogas and biofuels, despite current market challenges [14][15] Other Important Information - The company announced a $3.5 billion share buyback program, marking the 11th consecutive quarter of buybacks exceeding $3 billion [7] - The company is actively divesting non-core assets, such as the Energy and Chemicals Park in Singapore, to streamline its portfolio [4][20] Q&A Session All Questions and Answers Question: What has been better than expected since the Capital Markets Day? - Management highlighted strong momentum in operational performance improvements and cost reductions, with a focus on cultural change and prioritization within the organization [9][10] Question: How does the company view the evolution of the balance sheet and free cash flow usage? - Management emphasized a strong balance sheet that allows for both value-generating opportunities and consistent shareholder distributions, with a focus on predictability [11] Question: Can you provide an update on CapEx guidance and the Nature Energy acquisition? - Management acknowledged lower CapEx in the first half but expects to meet full-year guidance, while expressing confidence in the long-term potential of biogas despite current market pressures [13][15] Question: How does the company plan to address global oil demand and production targets? - Management reiterated a commitment to maintaining flat liquids production through 2030, focusing on high-margin assets and operational efficiency [17][18] Question: What is the expected impact of the Singapore divestment on earnings? - Management indicated that the divestment would contribute to OpEx reductions, with further details to be provided upon completion of the transaction [20][21] Question: How does the company view the potential of its marketing assets? - Management is focused on enhancing the performance of the mobility business and exploring ways to unlock value from marketing assets while improving overall profitability [41][42]

KEY TAKEAWAYS Shell reported higher-than-forecast second-quarter adjusted earnings, although refining margins at the energy giant dropped from the prior quarter. The company posted adjusted earnings per share of $0.99, which beat analysts' estimates. Refining margins fell to $8 a barrel in the second quarter from $12 a barrel in the first. Shell (SHEL) on Thursday reported higher-than-forecast second-quarter adjusted earnings, although refining margins at the energy giant dropped from the prior quarter. The ...

The Shell logo is displayed outside a petrol station in Radstock in Somerset, England, on Feb. 17, 2024. British oil giant Shell on Thursday posted stronger-than-expected second-quarter profit despite lower refining margins and weaker liquified natural gas trading. The oil and gas major reported adjusted earnings of $6.3 billion for the three-month period through to the end of June, beating analyst expectations of $5.9 billion, according to estimates compiled by LSEG. Shell's second-quarter profits were dow ...

Shell plc Shell announces commencement of a share buyback programme August 1, 2024 Shell plc (the 'Company') today announces the commencement of a $3.5 billion share buyback programme covering an aggregate contract term of approximately three months (the 'programme'). The purpose of the programme is to reduce the issued share capital of the Company. All shares repurchased as part of the programme will be cancelled. It is intended that, subject to market conditions, the programme will be completed prior to t ...

Shell plc Shell announces commencement of a share buyback programme August 1, 2024 Shell plc (the 'Company') today announces the commencement of a $3.5 billion share buyback programme covering an aggregate contract term of approximately three months (the 'programme'). The purpose of the programme is to reduce the issued share capital of the Company. All shares repurchased as part of the programme will be cancelled. It is intended that, subject to market conditions, the programme will be completed prior to t ...

London, August 1, 2024 − The Board of Shell plc (the "Company") today announced an interim dividend in respect of the second quarter of 2024 of US$ 0.344 per ordinary share. Details relating to the second quarter 2024 interim dividend Per ordinary share Q2 2024 Shell Shares (US$) 0.344 Shareholders will be able to elect to receive their dividends in US dollars, euros or pounds sterling. Absent any valid election to the contrary, persons holding their ordinary shares through Euroclear Nederland will receive ...

London, August 1, 2024 − The Board of Shell plc (the "Company") today announced an interim dividend in respect of the second quarter of 2024 of US$ 0.344 per ordinary share. Details relating to the second quarter 2024 interim dividend Per ordinary share Q2 2024 Shell Shares (US$) 0.344 Shareholders will be able to elect to receive their dividends in US dollars, euros or pounds sterling. Absent any valid election to the contrary, persons holding their ordinary shares through Euroclear Nederland will receive ...

London, August 1, 2024 "Shell delivered another strong quarter of operational and financial results. We further strengthened our leading LNG portfolio, and made good progress across our Capital Markets Day 2023 financial targets, including $1.7 billion of structural cost reductions since 2022. Today, we have also announced a further $3.5 billion buyback programme for the next three months. We continue to demonstrate that we are delivering more value with less emissions." Shell plc Chief Executive Officer, W ...