MW Shell to focus on share buybacks to boost stock over New York listing, CEO Wael Sawan says
By Louis Goss
Shell vowed to buy back another $3.5 billion share-buyback program after it beat expectations
Shell is not currently working on plans to shift its listing from London to New York, but is instead seeking to boost its stock price by buying more of its shares back from shareholders, company CEO Wael Sawan said in a call with investors Tuesday.
"I can tell you it's not a live discussion for us at the moment," Sawan said in response to an analyst's question on Shell (UK:SHEL) potentially moving its listing, following previous indications from the oil major's CEO that it might consider relisting in New York.
In an interview with Bloomberg in April, Sawan said the company would "look at all options" to close the valuation gap between Shell and its U.S. rivals Chevron $(CVX)$ and ExxonMobil, including by moving its listing to the U.S.
New York listing could still be a future option
Sawan, however, said on Tuesday that the FTSE-100 company is for now "very much" focused on share buybacks and improving its fundamentals, even as he acknowledged the company believes its share price is "below what we see as a fair market value at the moment."
Sawan, nonetheless, said a New York listing could still be an option in the future, as he suggested the energy giant's management has "a duty of care to look at ways to bridge that gap."
TotalEnergies $(TTE)$ CEO Patrick Pouyanne made similar comments in an interview with Bloomberg last Friday as he signaled the French oil major is also considering dropping its European listing and moving to the U.S.
On Tuesday, Shell vowed to buy back another $3.5 billion shares from shareholders after it beat first-quarter expectations, posting adjusted earnings of $7.73 billion, down 19.9% compared to a year ago, but higher than the $6.46 billion forecast by 18 analysts polled by Vara Research.
Higher margins in crude and oil-products trading
The energy giant, which in 2021 announced plans to move its headquarters to the U.K. from the Netherlands, saw its balance sheet boosted by higher margins from its crude and oil-products trading businesses, which partly offset lower margins in its LNG trading division.
Shell also increased its production by 10% compared to the fourth quarter of 2023, as it restarted its Prelude floating LNG terminal off the northwest coast of Australia in December 2023, having taken it offline four months earlier.
The energy firm's two biggest segments, covering its upstream assets and integrated-gas business, both beat analysts' expectations in posting adjusted first-quarter earnings of $3.7 billion and $1.9 billion respectively, despite seeing their profits drop over the previous quarter.
-Louis Goss
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May 02, 2024 11:18 ET (15:18 GMT)
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