Shell Share Price Rose 2.5% on Q4 and FY 2023 Trading Results

The Shell PLC (LON: SHEL) share price rose 2.5% after releasing its Q4 and full-year trading results for the 2023 financial year, which ended 31 December 2023. An improvement influenced earnings for Shell plc shareholders in the fourth quarter of 2023 in LNG trading and optimisation margins, positive deferred tax adjustments, and increased production.

These gains were balanced by decreased refining margins, reduced profits from crude and oil products trading and optimisation, and heightened operational costs. 

The income for the final quarter also encompassed net charges for impairments and reversals totalling $3.9 billion, along with adverse impacts from the fair value accounting of commodity derivatives, leading to a net quarter loss of $6.0 billion due to these identified items. 

This contrasts the third quarter of 2023, where identified items resulted in a net loss of $0.1 billion, primarily from impairment charges, nearly counterbalanced by positive fair value movements of commodity derivatives.

The adjusted earnings and EBITDA for the period were influenced by similar factors affecting Shell plc shareholder income, with adjustments made for the identified items and a positive $0.8 billion adjustment for the cost of supplies.

The cash flow generated from operations in the fourth quarter amounted to $12.6 billion. This was primarily fueled by the adjusted EBITDA, alongside a $3.3 billion influx from working capital, despite $3.6 billion in tax payments, a $1.0 billion outflow from derivatives, and $0.9 billion in delayed payments for emission certificates and biofuel programs.

Working capital increased primarily due to inventory adjustments from falling prices. Investment activities during the quarter resulted in a $5.7 billion outflow, with capital expenditures of $7.1 billion, slightly offset by $0.6 billion from divestments.

Regarding Shell plc’s financial leverage, net debt stood at $43.5 billion by the close of the fourth quarter, up from $40.5 billion at the end of the previous quarter. This increase was mainly due to share repurchases and dividends paid to shareholders.

Shell Plc share price. 

The Shell Plc share price rose 2.50% to trade at 2517.0p from Wednesday’s closing price of 2455.5p.