“We are delivering robust results at a time of ongoing volatility in global energy markets. We continue to strengthen Shell’s portfolio through disciplined investment and transform the company for a low-carbon future. At the same time we are working closely with governments and customers to address their short and long-term energy needs. Today we are announcing a new share buyback programme resulting in an additional $4 billion of distributions, which we expect to complete by our Q4 2022 results announcement. Furthermore, we plan to increase the dividend per share (DPS) for the fourth quarter, which will be paid in March 2023, by an expected 15%, subject to Board approval.”
ROBUST RESULTS FROM A RESILIENT PORTFOLIO
obust performance in a turbulent economic environment with lower crude prices and higher gas prices compared with Q2 2022. Adjusted Earnings of $9.5 billion in Q3 2022, with Adjusted EBITDA of $21.5 billion.
• Strengthening and simplifying the portfolio through the energy transition with completion of the Sprng Energy (India) acquisition, participation in the North Field South LNG expansion (Qatar) in October, the Rosmari-Marjoram field FID (Malaysia), the announced Aera Energy divestment (California, USA) and the acquisition of Shell Midstream Partners (USA).
• Disciplined cash capex: expected to be in the $23 – 27 billion range in 2022, evenly split between our Growth, Transition and Upstream pillars.
• $4 billion share buybacks announced, expected to be completed by Q4 2022 results announcement; total distributions in excess of 30% of CFFO for the last four quarters. Subject to Board approval, intention to increase DPS by an expected 15% for the fourth quarter, which will be paid in March 2023. Announced 2022 shareholder distributions ~$26 billion.
• Wael Sawan to succeed Ben van Beurden as Chief Executive Officer, effective January 1, 2023.
CFFO of $12.5 billion for Q3 2022 is driven by lower Adjusted EBITDA compared with Q2 2022 and working capital outflows. In working capital, the inventory price help in Q3 2022 resulting from lower crude prices is more than offset by the European gas inventory build-up and initial margin outflows in our Renewable and Energy Solutions business as well as regular accounts receivable and payable movements across the portfolio. As a result, net debt increased by ~$2.0 billion
(~4%), to $48.3 billion in Q3 2022, which includes the absorption of Sprng Energy’s debt
Q3 2022 FINANCIAL PERFORMANCE DRIVERS
Adjusted Earnings below Q2 2022 mainly reflecting lower trading and optimisation results in addition to lower volumes including the impact of maintenance and the Permitted Industrial Actions at Prelude.
Trading and optimisation results impacted by seasonality and supply constraints, coupled with substantial differences between paper and physical realisation in a volatile and dislocated market.
Q4 2022 outlook includes a similar level of midstream maintenance activities to Q3 2022.
UPSTREAM
Strong operational performance in Deep Water, resulting in Upstream benefiting from high-value barrels in Q3 production mix.
Adjusted Earnings benefited from non-cash provision releases and gains related to storage transfer effects in a joint venture.
Production was lower than in Q2 2022, mainly driven by the derecognition of Salym in Russia, along with unscheduled deferments, partly offset by higher scheduled maintenance in Q2
MARKETING
Marketing margins were higher than in Q2 2022, with seasonal impact of higher unit margins in Mobility, partly offset by lower margins in Lubricants and Sectors & Decarbonisation.
CHEMICALS & PRODUCTS
• Lower Refining margins in Q3 2022 due to a recovery in global product supply to meet demand.
• Trading and optimisation results in line with Q2 2022.
• Lower Chemicals margins due to higher feedstock and utility costs.
• Q4 2022 chemicals manufacturing plant utilisation outlook in line with Q3 2022, reflecting economic optimisation of our assets in the current margin environment
RENEWABLES & ENERGY SOLUTIONS
• Q3 2022 Adjusted Earnings and Adjusted EBITDA resulted from very strong trading and optimisation margins for gas and power, due to continued significant gas and power price volatility.
• Completed the acquisition of Sprng Energy group in India, significantly increasing operational renewable power generation capacity in the portfolio.
• Signed an agreement to acquire 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 development rights for standalone battery energy storage systems in three projects across two sites in California.
CORPORATE
• The Adjusted Earnings outlook is a net expense of $2,200 – 2,400 million for the full year 2022. This excludes the impact of
currency exchange effects
Download PDF
Source: Shell