LNG giant Shell reported a jump in its adjusted earnings in the fourth quarter while its LNG sales also rose when compared to the same period in the year before.
The firm said its adjusted earnings reached $9.81 billion in the quarter, a surge compared to $6.39 billion in the year before. Adjusted earnings rose 4 percent compared to $9.45 billion in the prior quarter.
Income attributable to Shell shareholders was $10.4 billion, compared with $11.46 billion last year and $6.74 billion in the previous quarter.
Quarterly income attributable to Shell shareholders also included net gains of $4.2 billion due to the fair value accounting of commodity derivatives, partly offset by charges of $1.9 billion related to the EU solidarity contribution and the UK Energy Profits Levy, and impairment charges of $0.7 billion, Shell said.
Compared with the third quarter, the rise of 54 percent was mainly due to higher LNG trading and optimization results and favorable deferred tax movements, it said.
Cash flow from operating activities for the fourth quarter reached $22.4 billion, and included working capital inflows of $10.4 billion, and tax payments of $4.4 billion.
Full year adjusted earnings rose 107 percent to record $39.8 billion while income attributable to Shell shareholders increased 110 percent to $42.3 billion on the back of high prices.
“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,” Shell’s new CEO, Wael Sawan, said in the statement.
“We intend to remain disciplined while delivering compelling shareholder returns, as demonstrated by the 15 percent dividend increase and the $4 billion share buyback program announced today,” he said.
LNG sales rise, liquefaction volumes down
Shell sold 16.82 million tonnes of LNG in the October-December period, a rise when compared to 16.72 million tonnes in the same period last year. Sales rose by 7 percent compared to 15.66 million tonnes in the prior quarter.
Full year LNG sales increased by 3 percent to 65.98 million tonnes.
However, liquefaction volumes dropped by 4 percent year-on-year to 29.68 million tonnes in 2022.
Quarterly liquefaction volumes reached 6.78 million tonnes, down compared to 7.24 million tonnes in the previous quarter and 7.94 million tonnes in the same quarter in 2021.
Shell said lower liquefaction volumes mainly reflect the derecognition of Sakhalin-related volumes and longer-than-expected maintenance at Prelude and operational issues at QGC in Australia.
The firm expects liquefaction volumes to be about 6.6-7.2 million tonnes in the first quarter.
Integrated gas earnings
Earlier this month, Shell said it was expecting “significantly higher” trading and optimization results for its integrated gas business in the fourth quarter of 2022 compared to the previous quarter.
The company’s integrated gas segment reported adjusted earnings of $5.96 billion in the fourth quarter, compared to $4.03 billion in the same period a year ago and $2.31 billion in the prior quarter.
Shell said the increase of $2.85 billion compared to the third quarter reflected the net effect of higher contributions from trading and optimization and realized prices.