Shel plc (LON:SHEL) has provided the following update to the second quarter 2024 outlook and gives an overview of our current expectations for the second quarter. Outlooks presented may vary from the actual second quarter 2024 results and are subject to finalisation of those results, which are scheduled to be published on August 1, 2024. Unless otherwise indicated, all outlook statements exclude identified items.
See appendix for previous quarter historical data.
Integrated Gas
| $ billions | Q2’24 Outlook | Comment |
| Adjusted EBITDA: | ||
| Production (kboe/d) | 940 – 980 | |
| LNG liquefaction volumes (MT) | 6.8 – 7.2 | |
| Underlying opex | 1.0 – 1.2 | |
| Adjusted Earnings: | ||
| Pre-tax depreciation | 1.2 – 1.6 | |
| Taxation charge | 0.8 – 1.1 | |
| Other Considerations: | ||
| Trading & Optimisation results are expected to be in line with Q2’23, but lower compared to Q1’24 due to seasonality. | ||
Upstream
| $ billions | Q2’24 Outlook | Comment |
| Adjusted EBITDA: | ||
| Production (kboe/d) | 1,720 – 1,820 | |
| Underlying opex | 2.1 – 2.7 | |
| Adjusted Earnings: | ||
| Pre-tax depreciation | 2.5 – 2.9 | |
| Taxation charge | 1.8 – 2.6 | |
| Other Considerations: | ||
| The share of profit / (loss) of joint ventures and associates in Q2’24 is expected to be ~$0.2 billion. Q2’24 exploration well write-offs are expected to be ~$0.2 billion. | ||
Marketing
| $ billions | Q2’24 Outlook | Comment |
| Adjusted EBITDA: | ||
| Sales volumes (kb/d) | 2,700 – 3,100 | |
| Underlying opex | 2.5 – 2.9 | |
| Adjusted Earnings: | ||
| Pre-tax depreciation | 0.3 – 0.7 | |
| Taxation charge | 0.2 – 0.5 | |
| Other Considerations: | ||
| Marketing results are expected to be in line with Q1’24. | ||
Chemicals & Products
| $ billions | Q2’24 Outlook | Comment |
| Adjusted EBITDA: | ||
| Indicative refining margin | $8/bbl | |
| Indicative chemicals margin | $155/tonne | Chemicals sub segment Adjusted Earnings are expected to be close to break-even in Q2’24. |
| Refinery utilisation | 91% – 95% | |
| Chemicals utilisation | 78% – 82% | |
| Underlying opex | 1.9 – 2.3 | |
| Adjusted Earnings: | ||
| Pre-tax depreciation | 0.7 – 0.9 | |
| Taxation charge | 0.1 – 0.5 | |
| Other Considerations: | ||
| Trading & Optimisation is expected to be in line with Q1’24. | ||
Renewables and Energy Solutions
| $ billions | Q2’24 Outlook | Comment |
| Adjusted Earnings | (0.5) – 0.1 |
Corporate
| $ billions | Q2’24 Outlook | Comment |
| Adjusted Earnings | (0.7) – (0.5) |
Shell Group
| $ billions | Q2’24 Outlook | Comment |
| CFFO: | ||
| Tax paid | 3.1 – 3.9 | |
| Derivative movements | (2) – 2 | Derivative movements and working capital estimations inherently have a broad range of uncertainty. |
| Working capital | (2) – 2 | |
| Other Shell Group Considerations: | ||
| Non-cash post tax impairments of $1.5 – $2 billion are expected, and mainly include the Singapore Chemicals & Products assets ($0.6 – $0.8 billion) as well as Rotterdam HEFA ($0.6 – $1.0 billion), which is reported in the Marketing segment. These items are reported as identified items. | ||
Guidance
The ‘Quarterly Databook’ contains guidance on Indicative Refining Margin, Indicative Chemicals Margin and full-year price and margin sensitivities (Link).
Consensus
The consensus collection for quarterly Adjusted Earnings, Adjusted EBITDA is per the reporting segments and CFFO at a Shell group level, managed by Vara Research, is expected to be published on July 25, 2024.
Appendix
Indicative Margins
For Integrated Gas Q1’24 realised prices have been restated. There is no impact of this revision on previously
reported segment financials and other key performance indicators.
| Integrated Gas Realised Prices | Q1’24 | Q1’24 Restated |
| Liquids ($/bbl) | 72.72 | 67.29 |
| Gas ($/thousand scf) | 8.86 | 7.84 |
| Chemicals & Products | Q1’24 | Q2’24 Updated Outlook |
| Indicative refining margin | $12/bbl | $8/bbl |
| Indicative chemicals margin | $150/tonne | $155/tonne |
Volume Data
| Q1’24 Adjusted | Q2’24 QPR Outlook | Q2’24 Updated Outlook | |
| Integrated Gas | |||
| Production (kboe/d) | 992 | 920 – 980 | 940 – 980 |
| LNG liquefaction volumes (MT) | 7.6 | 6.8 – 7.4 | 6.8 – 7.2 |
| Upstream | |||
| Production (kboe/d) | 1,872 | 1,630 – 1,830 | 1,720 – 1,820 |
| Marketing | |||
| Sales volumes (kb/d) | 2,763 | 2,700 – 3,200 | 2,700 – 3,100 |
| Chemicals & Products | |||
| Refinery utilisation | 91% | 87% – 95% | 91% – 95% |
| Chemicals utilisation | 73% | 72% – 80% | 78% – 82% |
Underlying Opex
| $ billions | Q1’24 | Q1’24 Adjusted | Q2’24 Updated Outlook |
| Production and manufacturing expenses | 5.8 | ||
| Selling, distribution and administrative expenses | 3.0 | ||
| Research and development | 0.2 | ||
| Operating Expenses (Opex) | 9.0 | 9.0 | |
| Less: Identified Items | (0.1) | ||
| Underlying Opex | 9.1 | ||
| of which: | |||
| Integrated Gas | 1.0 | 1.0 | 1.0 – 1.2 |
| Upstream | 2.4 | 2.4 | 2.1 – 2.7 |
| Marketing | 2.6 | 2.6 | 2.5 – 2.9 |
| Chemicals & Products | 2.1 | 2.1 | 1.9 – 2.3 |
| Renewables and Energy Solutions | 0.7 | 0.8 |
Depreciation, depletion and amortisation
| $ billions | Q1’24 | Q1’24 Adjusted | Q2’24 Updated Outlook |
| Depreciation, Depletion & Amortisation | 5.9 | 5.9 | |
| Less: Identified Items | 0.2 | ||
| Pre-tax depreciation (as Adjusted) | 5.7 | ||
| of which: | |||
| Integrated Gas | 1.4 | 1.4 | 1.2 – 1.6 |
| Upstream | 2.8 | 2.7 | 2.5 – 2.9 |
| Marketing | 0.5 | 0.5 | 0.3 – 0.7 |
| Chemicals & Products | 1.0 | 0.9 | 0.7 – 0.9 |
| Renewables and Energy Solutions | — | 0.1 |
Tax Charge
| $ billions | Q1’24 | Q1’24 Adjusted | Q2’24 Updated Outlook |
| Taxation Charge | 3.6 | 3.6 | |
| Less: Identified Items and Cost of supplies adjustment | (0.5) | ||
| Taxation Charge (as Adjusted) | 4.1 | ||
| of which: | |||
| Integrated Gas | 0.8 | 1.0 | 0.8 – 1.1 |
| Upstream | 2.1 | 2.5 | 1.8 – 2.6 |
| Marketing | 0.4 | 0.4 | 0.2 – 0.5 |
| Chemicals & Products | 0.2 | 0.3 | 0.1 – 0.5 |
| Renewables and Energy Solutions | 0.1 | — |
Adjusted Earnings
The “Adjusted Earnings” measure aims to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items. These items are in some cases driven by external factors and may, either individually or collectively, hinder the comparative understanding of Shell’s financial results from period to period. This measure excludes earnings attributable to non-controlling interest. For further details see the 1st Quarter 2024 unaudited results (Link).
| $ billions | Q1’24 | Q1’24 Adjusted | Q2’24 Updated Outlook |
| Income/(loss) attributable to Shell plc shareholders | 7.4 | 7.4 | |
| Add: Current cost of supplies adjustment attributable to Shell plc shareholders | (0.3) | ||
| Less: Identified items attributable to Shell plc shareholders | (0.6) | ||
| Adjusted Earnings | 7.7 | ||
| of which: | |||
| Renewables and Energy Solutions | 0.6 | 0.2 | (0.5) – 0.1 |
| Corporate | (0.4) | (0.5) | (0.7) – (0.5) |
Cautionary Note
The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Shell plc either directly or indirectly has control. The term “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
The numbers presented in this announcement may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding.
