Shell plc (NYSE: SHEL) reported fourth-quarter 2025 adjusted earnings of $3.3 billion, reflecting lower commodity prices, seasonally weaker downstream performance and non-cash tax updates, while maintaining strong cash flow and shareholder distributions.
Full-year adjusted earnings were $18.5 billion, down from $23.7 billion in 2024 amid lower oil and gas prices, while cash flow from operations reached $42.9 billion.
Shell’s 2025 results were shaped by active portfolio high-grading, including completion of the Adura joint venture with Equinor in the UK offshore sector. The group also finalized the divestment of its onshore Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), and completed an oil sands asset swap in Canada, exiting its remaining 10% mining interest. These structural actions, combined with underlying field declines, led to a negative 40% reserve replacement ratio on an SEC basis for the year.
Adjusted earnings for the fourth quarter were $3.3 billion, compared with $5.4 billion in the prior quarter, reflecting lower realized prices across Integrated Gas, Upstream and downstream segments.
Income attributable to shareholders was $4.1 billion in the quarter. Adjusted EBITDA totaled $12.8 billion. Cash flow from operations was $9.4 billion. Free cash flow reached $4.2 billion in the quarter. Net debt stood at $45.7 billion, with gearing at 20.7%.
Segmentally, Integrated Gas and Upstream remained the largest earnings contributors, while Chemicals & Products reported a quarterly loss and Marketing earnings declined sequentially due to seasonal and margin effects. Brent crude averaged $64 per barrel in the fourth quarter, compared with $69 in the previous quarter.
Adjusted EBITDA was $56.1 billion, and free cash flow reached $26.1 billion. Integrated Gas and Upstream earnings declined year-over-year due to lower realized prices, while Marketing delivered modest growth and Renewables & Energy Solutions returned to positive earnings. Average Brent prices declined to $69 per barrel in 2025 from $81 in 2024, weighing on earnings across core segments.
Shell declared a quarterly dividend of $0.372 per share, a 4% increase under its progressive dividend framework. The company announced a $3.5 billion share buyback program, with buybacks of at least $3 billion for the 17th consecutive quarter. Total shareholder distributions for 2025 exceeded $22 billion, representing 52% of cash flow from operations. Cash capital expenditure for 2025 was approximately $21 billion. The company maintained its capex framework of $20 billion to $22 billion annually for 2025-2028.
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Commodity price declines were a key factor in earnings moderation. Average Brent prices fell year-over-year, while refining and chemical margins showed mixed trends. Indicative refining margins improved year-over-year, but chemical margins were lower compared with 2024. Gas pricing benchmarks showed mixed trends, with higher European gas prices but lower U.S. gas prices relative to 2024.
Net debt remained at $45.7 billion at year-end 2025. Shell reported delivery of more than $5 billion in structural cost reductions since 2022 and targets total structural cost reductions of $5 billion to $7 billion by end-2028.
Shell continues to target shareholder distributions of 40% 50% of cash flow from operations through the cycle.
The company expects to maintain annual capex in the $20 billion to $22 billion range and pursue structural cost reductions through 2028.
Long-term plans include normalized free-cash-flow-per-share growth of more than 10% annually through 2030 under current planning assumptions.
The post Shell Q4 Earnings Decline on Lower Prices; Maintains Buybacks, Dividend and Capex Discipline first appeared on AlphaStreet.
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