LONDON, Feb 1 (Reuters) - Shell on Thursday reported a 2023 profit of $28 billion, down 30% from the previous year's record as oil and gas prices cooled, still allowing the firm to increase its dividend by 4% and extend its share repurchases.
Shell posted fourth-quarter adjust earnings, its definition of net profit, of $7.3 billion, exceeding analysts' expectations of $6 billion profit but down from a record $9.8 billion a year earlier.
Strong liquefied natural gas (LNG) trading results in the quarter helped offset weaker refining and oil trading results.
Shell increased its dividend by 4% from the previous quarter to $0.344 per share, a 20% increase on an annual basis. It is the seventh increase since its historic dividend cut in the wake of the COVID-19 pandemic.
The British company also announced the repurchase of a further $3.5 billion of its shares over the next three months, a similar rate to the previous three months.
Its share distributions in 2023 reached nearly $23 billion, representing more than 10% of Shell's market value and over 40% of its cash flow from operations.
"As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions," Chief Executive Officer Wael Sawan said.
But in a worrying sign for the firm, Shell's free cash flow, or excess money after investment, fell to $7 billion in the fourth quarter, the lowest in 2023 and less than half the previous year's $15.5 billion.
Shell is the first major energy company to report 2023 full year results. Exxon Mobil and Chevron will report on Friday, while BP and Total report next week.
Shell's shares have outperformed rivals over the past year, rising by over 8%.
Sawan, who took the helm in January 2023, vowed to revamp Shell's strategy to focus on higher-margin projects, steady oil output and grow natural gas production.
As part of the strategy, Shell has started company-wide staff reductions, including in its low-carbon solutions division, in a drive to save up to $3 billion.
Reporting by Ron Bousso; editing by Jason Neely and Lincoln Feast.
Source: Reuters