Shell pls. (SHEL) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 26, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers (Media)

Questions and Answers (Analyst)

Call Participants

Prepared Remarks:

Wael Sawan - CEO

Welcome everyone. Today, Sinead and I will be presenting our second quarter results for 2023.

During Capital Markets Day, we reiterated our commitment to our Powering Progress strategy, including Net Zero emissions by 2050.We also outlined our plans over the coming years to deliver more value with less emissions.I'm pleased with the progress we are making on our journey.

In the first half of this year, we delivered our second-highest Adjusted Earnings in a decade. Better than in the same period in 2014 when the average Brent oil price stood at some 110 dollars per barrel, compared with 80 dollars per barrel this year.And we continue to help our customers cut their carbon emissions while reducing emissions from our own operations.For instance, in the first half of this year, we removed 0.4 million tons of greenhouse gas emissions through abatement projects.

This removal is equivalent to taking more than 160 thousand cars off Europe's roads for a year.Performance, discipline and simplification continue to be our guiding principles.

And in the second quarter, we demonstrated strong operational performance across our portfolio.Take Prelude, our floating LNG facility in Australia, which delivered its highest quarterly production since start-up in 2018.In Renewables & Energy Solutions,

our crosswind JV produced its first green electricity in June.This is an exciting ongoing project that, when completed, is expected to produce around 3% of the Netherlands' total demand for electricity.

In the Gulf of Mexico, our turnaround operations at Appomattox, Perdido, and Olympus were safely completed ahead of schedule and below budget. And, in Downstream, our improved Shell V-Power formulation, which can clean up to 100% of deposits on vital engine parts, delivered strong volume and margin growth.

However, despite this strong operational performance, our financial results were impacted by lower commodity prices, planned maintenance, and the skew of our LNG portfolio towards a northern hemisphere winter.

Our 4-quarter business and financial delivery has been strong, enabling us to responsibly invest in our businesses, reduce debt, all while enhancing shareholder distributions. At our Capital Markets Day we announced a 15% step-up in the dividend, and a plan to buy back a minimum of 5 billion dollars of shares in the second half of 2023, subject to Board approval. We continue to believe our shares represent significant value, and so today, in addition to delivering on the dividend increase, we are commencing a buyback program of 3 billion dollars for the next three months. With that, let me hand over to Sinead to tell us more about our financial results in the quarter.