Group results

Earnings 2023-2022

Income attributable to Shell plc shareholders in 2023 was $19,359 million, compared with $42,309 million in 2022. With non-controlling interest included, income for the period in 2023 was $19,636 million, compared with $42,874 million in 2022. After current cost of supplies adjustment, total segment earnings* in 2023 were $20,281 million, compared with $41,562 million in 2022.

Adjusted Earnings* in 2023 were $28,250 million, compared with $39,870 million 2022. The decrease was mainly driven by lower realised oil and gas prices, lower volumes and lower refining margins, partly offset by higher LNG trading and optimisation margins, and higher Marketing margins.

2023 income attributable to Shell plc shareholders also included net impairment charges and reversals of $6,219 million, and unfavourable movements of $1,284 million due to the fair value accounting of commodity derivatives. These charges and unfavourable movements are included in identified items amounting to a net loss of $8,252 million.

Integrated Gas earnings* in 2023 were $7,046 million, compared with $22,212 million in 2022. The decrease was mainly driven by unfavourable movements due to the fair value accounting of commodity derivatives, net impairment charges and reversals, the net effect of lower realised prices, and higher contributions from trading and optimisation, unfavourable deferred tax movements, and lower volumes.

Upstream earnings* in 2023 were $8,528 million, compared with $16,222 million in 2022. The decrease was mainly driven by lower realised oil and gas prices, lower volumes, and net impairment charges and reversals.

Marketing earnings* in 2023 were $2,950 million, compared with $2,133 million in 2022. The increase was mainly driven by higher Marketing margins, including higher unit margins in Mobility, higher margins in Lubricants due to lower feedstock costs, and higher volumes in Sectors and Decarbonisation. These were partly offset by higher operating expenses and depreciation charges, mainly as a result of asset acquisitions.

Chemicals and Products earnings* in 2023 were $1,530 million, compared with $4,515 million in 2022. The decrease was mainly driven by net impairment charges and reversals, and lower Products margins, which were mainly driven by lower refining margins and partly offset by higher margins from trading and optimisation. Segment earnings also reflected higher depreciation charges, due to start-up of operations at Shell Polymers Monaca in the USA, partly offset by higher Chemicals margins.

Renewables and Energy Solutions earnings* in 2023 were $3,038 million, compared with a loss of $1,059 million in 2022. The increase was mainly driven by favourable movements due to the fair value accounting of commodity derivatives. This was partly offset by lower margins, mainly from trading and optimisation due to lower gas and power prices in 2023, net impairment charges and reversals, unfavourable tax movements and higher operating expenses.

Corporate segment earnings* in 2023 were an expense of $2,811 million, compared with an expense of $2,461 million in 2022. The rise in expense was mainly driven by unfavourable movements in currency exchange rate effects and tax credits.

Prior year earnings summary

Our earnings summary for the financial year ended December 31, 2022, compared with the financial year ended December 31, 2021, can be found in the Annual Report and Accounts (page 29) and Form 20-F (page 33) for the year ended December 31, 2022, as filed with the Registrar of Companies for England and Wales and the US Securities and Exchange Commission, respectively.

Cash flow from operating activities

Cash flow from operating activities was $54,191 million in 2023, compared with $68,414 million in 2022. The cash flow from operating activities in 2023 was primarily driven by Adjusted EBITDA, and working capital inflow of $7.8 billion, partly offset by tax payments of $13.7 billion, and derivatives outflow of $6.1 billion.

Cash capital expenditure

Cash capital expenditure* was $24,392 million in 2023, compared with $24,833 million in 2022. The cash capital expenditure in 2023 consisted of $12.5 billion investments in oil, oil products and other, $5.6 billion investments in low-carbon energy solutions, $4.0 billion investments in LNG gas and power marketing and trading and $2.3 billion investments in non-energy products.

Operating expenses and Underlying operating expenses

Operating expenses* were $39,960 million in 2023, compared with $39,476 million in 2022. Underlying operating expenses* were $39,201 million, compared with $39,456 million in 2022.

Return on average capital employed

Our return on average capital employed (ROACE)* decreased to 8.4%, compared with 16.7% in 2022, mainly driven by lower earnings.

Total debt, Net debt and gearing

Total debt was $81,541 million at the end of 2023, compared with $83,795 million at the end of 2022.

Net debt* was $43,542 million at the end of 2023, compared with $44,837 million at the end of 2022.

Gearing* was 18.8% at the end of 2023, compared with 18.9% at the end of 2022.

Significant accounting estimates and judgements

See Note 2 to the "Consolidated Financial Statements".

Legal proceedings

See Note 31 to the "Consolidated Financial Statements".

Production available for sale

Oil and gas production available for sale in 2023 was 2,791 thousand boe/d, compared with 2,864 thousand boe/d in 2022. This reduction was mainly driven by divestments and partly offset by growth from new fields.

Proved reserves

The proved oil and gas reserves of Shell subsidiaries and the Shell share of the proved oil and gas reserves of joint ventures and associates are summarised in "Oil and gas information" and set out in more detail in "Supplementary information – oil and gas (unaudited)".

Before taking production into account, our proved reserves increased by 1,274 million boe in 2023. Total oil and gas production was 1,065 million boe. Accordingly, after taking production into account, our proved reserves increased by 209 million boe in 2023, to 9,787 million boe at December 31, 2023.

* Non-GAAP measure (see Non-GAAP measures reconciliations).