In its usual teaser ahead of first quarter results Shell (SHEL) has upped the expected hit associated with its Russian exit from $3.4 billion to as much as $5 billion.

The shares fell 1.3% to £21.02 - though this likely reflected some weakness in oil prices too. In a wider context prices of both oil and natural gas are historically high and this is expected to have some beneficial impact on the company’s financial performance in the first three months of 2022.

The post-tax impairments on its assets in Russia are also not expected to have an impact on adjusted earnings, the company did not provide any update on the timetable for a sale of the assets.

Shell is a global leader in liquefied natural gas and it is guiding for quarterly earnings from LNG trading to be higher than in the last three months of 2021. Earnings from oil trading are set to be ‘significantly higher’ in the quarter.

HIGHEST RETURNS IN A DECADE

Writing after a strong set of full year numbers in February, Berenberg observed: ‘The key will be delivering consistent production and operations so that the company can benefit from the strong environment for LNG (liquefied natural gas). We believe Shell will deliver the highest returns in a decade in 2022, while returning around 9% of the market cap to shareholders in cash.’

In that context much of the focus when the company reports its first quarter numbers in full on 5 May will be on operational performance as well as the latest assessment of the impact on the business of the Ukrainian conflict.

LEARN MORE ABOUT SHELL

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJBell logo

Issue Date: 07 Apr 2022