Adjusted net profit came to $5.43 billion, well above analyst expectations of $4.74 billion, according to the three-month figures published before the market.
The profit growth mainly comes from the Integrated Gas (USD 2.14 billion) and Upstream (USD 1.80 billion) divisions. Marketing (1.32 billion dollars) and Renewables & Energy Solutions (92 million dollars) also performed above expectations. Once again the Chemicals & Products division, with a turnover of 550 million dollars, lags behind. It also fell short of the market’s prior forecast of $659.6 million.
Debt decreases
Revenue came to $68.15 billion, lower than the expected $70.73 billion. Operating cash flow was $12.21 billion, versus expectations of $10.92 billion.
Net debt fell to $41.2 billion, with a debt ratio of 18.8 percent. The quarterly dividend remained unchanged at 35.8 dollar cents per share. Oil and gas production rose to 2.82 million barrels of oil equivalent per day, above the expected 2.75 million.
Depreciation of biofuel factory
Earlier this month, Shell reported a write-down of approximately 600 million euros on the biofuel factory in Pernis, the construction of which has been permanently halted. The plant was intended to be one of the largest European production sites for sustainable aviation fuel and renewable diesel with lower CO2 emissions.
The depreciation is at the lower end of the previously reported bandwidth of 600 million to 1 billion euros. The amount also includes reservations for the partial restoration of the location.
Volatile green fuels market
Construction of the plant began in 2022 but was paused in 2024 due to rising costs and market conditions. Shell indicated that the investment was no longer sustainable. “The market for biofuels has become more volatile than anticipated,” a spokesperson said on October 7.
Analysts already reported in the October 7 update that they expected a total write-down of approximately $1 billion. This would hurt Shell’s overall turnover, but would not pose an insurmountable problem.
Gas major moneymaker
Shell-Sawan previously reported that liquefied natural gas remains the key growth area. “LNG replaces coal, reduces emissions and provides reliable energy,” said Sawan.
The Integrated Gas division expects production of 910,000 to 950,000 barrels of oil equivalent per day in the fourth quarter. A barrel has almost 159 liters. Shell continues to invest in LNG projects, including in Canada, where the second phase of LNG Canada has received government support to start.
More oil and gas for the time being
According to analysts, the decision on Pernis confirms a broader strategy in which Shell focuses on activities with more stable returns. Biofuel makers have to deal with high raw material prices, changing policies and slow licensing.
Shell maintains its 2025 capital expenditure forecast in the range of $20 billion to $22 billion. Analysts remain positive: there are 18 buy recommendations, 9 hold recommendations and no sell recommendations on Shell at the moment.