New Delhi | May 3, 2025 — Shell has reported a significant 28% drop in its first-quarter net profit for 2025, totaling $5.58 billion, down from $7.73 billion in the same period last year. This decline reflects the ongoing volatility in global energy markets, primarily driven by weaker oil prices and reduced refining margins. Despite this drop, the company managed to exceed analyst expectations, which had forecast a profit of $4.96 billion.
The energy giant’s total revenue for the quarter also saw a decline, dropping 6% to $70.2 billion. This drop in revenue is largely attributed to the global slowdown in demand for crude oil, exacerbated by concerns surrounding geopolitical factors and economic uncertainties. While this decline might seem alarming, Shell’s ability to beat analysts’ expectations in a challenging environment speaks to its operational strength and resilience.
Shell’s Strong Financial Position Despite Market Challenges
Despite the sharp drop in profit, Shell remains confident in its financial position, maintaining its focus on shareholder returns. CEO Wael Sawan expressed optimism about the company’s ongoing ability to generate cash flow, emphasizing that the results provide the company with the confidence to continue its $3.5 billion share buyback program for the next three months. This marks the 14th consecutive quarter where Shell has repurchased shares in significant amounts, reflecting the company’s commitment to returning value to its shareholders.
The share buybacks come as part of Shell’s broader strategy to reward investors while also maintaining financial flexibility in uncertain market conditions. The company’s gearing ratio currently stands at 18.7%, which highlights its solid balance sheet, especially in comparison to rivals like BP, which has a higher gearing ratio of 25.7%. This financial resilience allows Shell to weather market fluctuations while staying committed to its dividend policy and shareholder returns.
The company’s performance is also bolstered by its chemical and products divisions, including refining and oil trading, which reported a substantial recovery in the first quarter. Earnings from these segments more than tripled to $2.8 billion, largely driven by disruptions to shipping in the Red Sea and outages at refineries in Russia. These factors provided Shell with a temporary boost, offsetting some of the negative effects of the lower oil prices.
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