Shell Reports Strong Profits and Announces Share Buyback

Shell has announced adjusted earnings of $7.7 billion for the first quarter of 2024, reflecting a robust financial performance. The company plans to initiate a $3.5 billion share buyback program over the next three months, maintaining a similar pace to the previous quarter. CEO Wael Sawan expressed confidence in the company's progress towards becoming more disciplined and value-focused, stating, "We're halfway through" in their transformation journey. Sawan highlighted significant advancements in cost management, capital discipline, and operational performance, noting that Shell has achieved $1.7 billion in structural cost reductions since 2022. The company aims to further reduce costs by $2 billion to $3 billion by the end of next year. This comes as British rival BP recently increased its dividend and extended its share repurchase program following strong earnings. Despite the positive financial outlook, Shell has warned of a potential impairment charge of up to $2 billion due to the sale of its Singapore refinery and the suspension of construction at its Rotterdam plant. These moves are part of Sawan's strategy to reduce Shell's carbon footprint and concentrate on its most profitable operations. When questioned about Shell's commitment to its 2050 net-zero target, Sawan reaffirmed the company's dedication, acknowledging the challenges ahead: "We are absolutely committed to the 2050 target, but we also recognize that the trajectory from here to there is not a linear one." Shareholders are keenly awaiting further updates on this journey.