Shell's Profit Miss: A Perfect Storm of Low Margins and LNG Woes

Shell reports a decline in fourth-quarter profits, underperforming market expectations due to lower refining margins and challenges in LNG trading. The company announced a significant share buyback and a dividend increase. CEO Wael Sawan faces pressure to cut costs and focus on lucrative sectors like oil, gas, and biofuels.

Shell reported a notable decline in its fourth-quarter profits, missing analysts' expectations amid lower refining margins and issues in LNG trading. This comes as the energy giant announced a $3.5 billion share buyback and a 4% increase in dividend payouts.

The company's adjusted earnings reached $3.66 billion for the quarter ending December 31, a sharp drop from $7.31 billion a year prior, and below the $4.09 billion forecasted by analysts polled by Vara Research. The shortfall adds pressure on CEO Wael Sawan, as he seeks to optimize operations by cutting costs and concentrating on high-profit sectors such as oil, gas, and biofuels, moving away from renewable energy efforts.

Shares in Shell edged up slightly by 0.25%, as the firm also projected a decrease in capital expenditure for 2025 compared to the previous year. This projection will be further detailed at its upcoming capital markets day. The broader oil and gas industry witnessed a decrease in profits throughout 2024, attributed to energy price stabilization and weakening oil demand.

(With inputs from agencies.)