Shell (LSE: SHEL) has sounded the alarm on a looming profit slump in its integrated gas unit for the first quarter of 2024. The FTSE 100 behemoth anticipates adjusted earnings before tax and depreciation for the division to plummet to $1.2 billion – $1.6 billion, a precipitous drop from the preceding quarter’s exceptional performance.
While trading and optimisation activities are anticipated to be robust, Shell cautioned that these results would pale in comparison to the stellar numbers posted in Q4 2023. The oil major projects production volumes of 960,000 to 1,000,000 barrels of oil equivalent per day, alongside liquefied natural gas liquefaction volumes ranging from 7.2 million to 7.6 million tonnes during the January-March period.
In a further dampener, Shell has flagged $600 million in exploration well write-offs within its upstream division, primarily stemming from operations in Albania. The upstream unit’s adjusted earnings before tax and depreciation are forecasted to settle between $2.7 billion and $3.1 billion, with production estimates hovering between 1,820,000 and 1,920,000 barrels of oil equivalent per day.
Shifting to its chemicals and products segment, Shell anticipates a significant upswing in trading and optimisation activities compared to Q4 2023, translating to adjusted earnings before tax and depreciation of $0.8 billion to $1.0 billion. Meanwhile, marketing results are projected to remain consistent with the previous quarter’s performance, with adjusted earnings forecasted at $0.3 billion to $0.7 billion.
The renewables and energy solutions division presents a mixed bag, with adjusted earnings ranging from a $100 million loss to a $500 million profit. Conversely, the corporate segment is bracing for an adjusted loss spanning $0.4 billion to $0.6 billion.
Despite the cautionary guidance, Shell’s shares remained steady in Friday’s early trading session.
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