Shell reports a sizable hit to Q1 bottom-line due to Russia exit

Shares of Shell plc (LON: SHEL) are up 4.0% on Thursday after the British oil giant cited higher prices and lower expenses as it reported better-than-expected profit for its fiscal first quarter.

Shell Q1 financial highlights

Adjusted profit shot up 43% YoY to $9.13 billion versus $8.67 billion expected.Quitting Russia resulted in a $3.90 billion hit to the bottom-line in fiscal Q1.Net profit sunk from $11.46 billion to $7.12 billion in the recent quarter.Total production was down 6.0%, as per the earnings press release.At $14.82 billion, cash from operations noted an annualised increase of 81%.

Dividend, buyback, and net debt

Also on Thursday, Shell declared 25 cents a share of dividend and said its $8.50 billion stock repurchase programme will be executed by the end of the fiscal first half. According to the British multinational, shareholder returns will be over 30% of operating cashflow in H2.

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Shell also reduced its net debt in the quarter by $4.07 billion. It now has a net debt of $48.49 billion. The stock is up more than 35% for the year at present.

Shell’s forecast for its fiscal Q2

For the current fiscal quarter, Shell expects increased scheduled maintenance and lower seasonal demand to drop upstream production to 1.75 million – 1.95 million barrels a day. Marketing sales volumes in Q2 are expected between 2.30 million and 2.80 million versus 2.37 million in the recently reported quarter.

The London-headquartered company also expects a decline in LNG volumes to 7.4 million – 8.0 million metric tons but Integrated Gas production will likely climb to the range of 910,000 to 960,000 oil-equivalent barrels per day.