So, last week, I made a mistake and over-committed myself. As a result, the edition for last week just never materialised. But that was last week; now it’s this week, and I am back on deck! Without further adieu.

This week, we will look at Shell. As usual, we will take their financial statement and produce some visuals to make it easier to understand how they performed in 24Q2.

Today in a Snapshot

📈Financial Performance: U$3.6B in net profit with a total margin of 4.9%, up from U$3.1B (4.1%) in 23Q2.
💵Cashflow: Dipped into cash reserves for U$1.8B.
⚖️Balance Sheet: No significant changes since 24Q1

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Shell recorded a reduction in revenue this quarter but managed to increase its net profit to U$3.7B with a net margin of 4.9%, up from U$3.1B and 4.1% net margin.

Integrated Gas: This segment had an EBITDA of U$5.0B, up from U$4.8B in 23Q2. Shell also reached a FID on the Manatee project, an undeveloped gas field in the East Coast Marine Area (ECMA) in Trinidad and Tobago.

Upstream: This segment took a slight hit due to the weakening of the Brazilian real. Overall, it produced an EBITDA of U$7.8B, which was up from U$6.5B in 23Q2. Shell announced a 16.7% stake in the FID for the Atapu-2 project, a second floating production, storage and offloading (FPSO) vessel to be deployed at the Atapu field within the offshore Santos basin in Brazil.

Marketing: Seasonally, this is a good time for this sector. The sector benefited from improved Mobility unity margins. The EBITDA was U$2.0B, up from U$1.7B in 23Q2. Shell halted its construction as the biofuel facility at the Shell Energy and Chemicals Park in Rotterdam. It aims to address project delivery and ensure future competitiveness given current market conditions. There was approx. U$50M associated with redundancy and restructuring for this site

Chemicals & Products: This segment took a U$708M loss due to net impairment charges associated with an asset in Singapore. The EBITDA was U$2.2B, up from U$1.2B in 23Q2. Shell announced an FID for Polaris, a 650,000 tonne of CO2 per annum carbon capture project in Scotford, Alberta, Canada.

Renewables & Energy: Not so great this quarter with an EBITDA of -$U91M, down from U$452M in 23Q2. This is attributed to lower seasonal demand and volatility in the market.

Shell was forced to dip into its cash reserves by U$1.8B, reducing its overall reserves to U$38.1B (-5%). With that amount of money in reserve, the business can handle many more periods like this.

There isn’t much exciting going on here today. The overall debt has reduced; however, so have the cash reserves.

As usual, the equity walk is interpolated from the Q1 and the H1 information. This sometimes produces odd results. In this case, share-based compensation created the business equity. My guess is that this was the compensation that people did not receive as KPIs were not fully achieved. I am just spitballing here. I'm not 100% sure on that one; it’s a large number, so I could be completely wrong on that justification.

The debt-to-equity ratio improved slightly, reducing from 1.14 to 1.11.

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Cheers,

Connor

All data can be found on the Shell Investors website.