Last checked at 
(Alliance News) - Shell on Thursday hailed a "momentous year" as earnings ballooned after the Covid-19 hit that the oil major took in 2020. The recently renamed company also said it will lift shareholder returns.
Shell, fresh from simplifying its share structure and dropping 'Royal Dutch' from its name, posted substantially stronger annual earnings and an increased payout.
For the fourth quarter of 2021, total revenue, so including joint-ventures and interest income, more than doubled annually to USD90.22 billion from USD45.03 billion. Fourth-quarter pretax profit multiplied to USD16.27 billion from USD1.19 billion.
Fourth-quarter earnings were boosted by rampant oil prices.
For the whole of 2021, revenue increased by 49% to USD272.66 billion from USD183.20 billion. Shell swung to an annual pretax profit of USD29.83 billion from a USD26.97 billion loss in a Covid-damaged 2020.
At USD19.29 billion, up sharply from USD4.85 billion, adjusted earnings for the year topped market consensus of USD18.01 billion.
"2021 was a momentous year for Shell. We launched our Powering Progress strategy and simplified our share structure and organisation. Progress made in 2021 will enable us to be bolder and move faster. We have a compelling strategy, with customers at its core. We have ambitious plans to generate shareholder value, to decarbonise our products and to provide energy to our customers while respecting nature," Chief Executive Ben van Beurden said.
Shell said it will increase the pace of its share buybacks to USD8.5 billion in the first half of 2022, including the remaining USD5.5 billion proceeds from its Permian disposal. Shell in January vowed to progress its buybacks "at pace".
Shell also increased its annual dividend by 37% to USD0.8935 per share, from USD0.6530 in 2020. The company will raise its first quarter dividend to USD0.25 per share from the USD0.24 declared for the fourth quarter of 2021.
Looking ahead, Shell said cash capital expenditure for 2022 will be at the lower end of a USD23 billion to USD27 billion range.
Shell shares were 1.1% higher early Thursday.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: up 0.2% at 7,598.18
----------
Hang Seng: Hong Kong market closed for Lunar New Year holiday
Nikkei 225: closed down 1.1% at 27,241.31
S&P/ASX 200: closed down 0.1% at 7,078.00
----------
DJIA: closed up 224.09 points, or 0.6%, at 35,629.33
S&P 500: closed up 42.84 points, or 0.9%, at 4,589.38
Nasdaq Composite: closed up 71.54 points, or 0.5%, at 14,417.55
----------
EUR: soft at USD1.1291 (USD1.1295)
GBP: down at USD1.3552 (USD1.3560)
USD: up at JPY114.59 (JPY114.33)
Gold: down at USD1,804.39 per ounce (USD1,808.75)
Oil (Brent): firm at USD89.16 a barrel (USD89.02)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Thursday's key economic events still to come
China Chinese New Year. Financial markets closed in Hong Kong and Shanghai
0955 CET Germany services purchasing managers index
1000 CET EU eurozone services PMI
1100 CET EU producer price index
1345 CET EU ECB interest rate decision
0930 GMT UK services PMI
1200 GMT UK BoE quarterly monetary policy report
1200 GMT UK BoE interest rate decision
0830 EST US unemployment insurance weekly claims report
0945 EST US services PMI
1000 EST US ISM services PMI
1030 EST US EIA weekly natural gas storage report
1200 EST US monthly US retail chain store sales index
----------
Ireland's private sector remained in expansion at the start of 2022, but still remained at the lowest level since March last year, survey results from IHS Markit showed. The Ireland composite output index remained flat at 56.1 points in January, still at its lowest since March 2021. The index is a blend of the services and manufacturing purchasing managers' index readings for the month. The AIB Ireland services PMI rose to 56.2 index points in January from 55.4 in December, reflecting stronger increases in new business and total activity.
----------
The Japanese private sector fell back into contraction territory at the start of 2022, with the services sector suffering from a reduction in business activity amid renewed restrictions and a rise in Covid-19 cases. The au Jibun Bank Japan services PMI dropped to 47.6 index points in January from 52.1 in December, marking the strongest rate of decline since August 2020. On Tuesday, IHS Markit said the manufacturing PMI rose to 55.4 in January from 54.3 in December. As a result, the composite PMI output index dropped to 49.9 in January from 52.5 in December, though was above the flash print of 48.8 points.
----------
BROKER RATING CHANGES
----------
Goldman Sachs cuts Bunzl to 'sell' ('neutral') - target 2650 (2850) pence
----------
Peel Hunt raises Trainline to 'buy' (hold) - price target 440 (461) pence
----------
COMPANIES - FTSE 100
----------
Telecommunications operator BT posted weaker year-to-date earnings following the conclusion of its third quarter. It also unveiled a possible joint-venture for its sports broadcasting unit, after "a detailed process to identify the best way to generate investment". BT said it is in exclusive talks with the US's Discovery, which owns Eurosport UK. "The new business would be a 50/50 joint venture, bringing together BT Sport with Eurosport UK. The new combined business would remain committed to retaining BT Sport's existing major sports broadcast rights while BT Sport customers would get access to Discovery's sport and entertainment content, including the discovery+ app," BT said. It is aiming to conclude the discussions in "early Q1", eyeing the JV being operational later this year. BT had long been rumoured to sell BT Sport. In January, Reuters reported BT was close to selling the unit to streaming service DAZN in a deal worth roughly USD800 million.
----------
BT said revenue in the nine months to December 31 fell 2.4% to USD15.68 billion from USD16.06 billion a year earlier. Pretax profit declined 3.4% to USD1.54 billion from USD1.59 billion. "BT has had a good quarter with encouraging market share performance, and we continued to make significant improvements in customer service, although revenue from our enterprise divisions was softer than we expected," Chief Executive Philip Jansen commented. In addition, Jansen noted BT has reached a deal in principle with broadcaster Sky for a "new longer-term reciprocal channel supply deal to beyond 2030".
----------
Contract caterer Compass said its revenue grew 39% on an organic basis in the first quarter ended December 31. "The quarterly improvement was largely driven by new business, continued strong client retention along with some ongoing recovery in the base business. The emergence of the Omicron variant had a limited impact on the group during the period," the company said. First-quarter revenue hit 97% of pre-virus levels. In North America alone, it topped levels seen in 2019. Compass warned of a currency hit, however. If currency movements continue as they have been, the company will see a GBP75 million hit to revenue and GBP3 million to operating profit. "Our guidance for FY22 remains unchanged. We expect full-year organic revenue growth of 20% to 25%, with quarterly growth rates moderating through the year, reflecting more challenging comparatives," Compass added.
----------
COMPANIES - FTSE 250
----------
Gambling software firm Playtech, fresh from having its takeover by Australia's Aristocrat Leisure rejected by shareholders on Wednesday, confirmed that TTB Partners, an affiliate of Gopher Investments, approached Playtech asking for consent to make a possible offer. Playtech said it granted the release from restrictions under the UK takeover code to allow a bid. Gopher, which is buying Playtech's financial trading arm Finalto, had previously decided against making an offer for the entire company, resulting in the code restrictions on a new approach. Playtech said any offer from TTB would be in cash, but noted there is not certainty an offer will be made.
----------
COMPANIES - GLOBAL
----------
Westpac Banking reported a statutory net profit of AUD1.82 billion in quarter that ended December 31, the first quarter of its financial year. This is up 80% on the quarterly average for the second half of financial 2022. The Australian lender reported a net interest margin of 1.91%, down 8 basis points, citing competition and higher liquid assets. Common equity tier 1 capital ratio was at 12.2%. "We have made a sound start to the year and we are seeing the cost benefits of our simplification programs. The environment however remains highly competitive, and we continue to see pressure on margins," says Chief Financial Officer Michael Rowland. As a result, he said Westpac is accelerating plans to simplify the bank's operating structure.
----------
Thursday's shareholder meetings
Compass Group PLC - AGM
Future PLC - AGM
Hyve Group PLC - AGM
JPMorgan Indian Investment Trust PLC - AGM
Sage Group PLC - AGM
Ten Lifestyle Group PLC - AGM
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
