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Shell (LSE: Shel) Actions have increased only 4% in the last 12 months. As such, an investment made a year ago would be worth £ 10,400 today. However, an investor would also have received around £ 400 in the form of dividends. Then, 8% total yields. It's not bad but it's not great.
What has been happening?
The prices of Shell's actions have been modest, despite the company's efforts to rationalize operations and improve financial performance. This slow performance can be attributed to several factors.
First, oil prices have fluctuated in the last 12 months, but the general direction is down. While I write, Brent crude prices have dropped 8.5% during the year, and this will have an impact on the final result.

Although Shell has managed to expand its production by 2%, the fall in oil prices and gas has also pressed downstream margins, resulting in a 17% decrease in income attributable to shareholders in 2024. This has damping the enthusiasm of investors and limited growth of shares prices.
Macroeconomic uncertainties have also played a role. China, the world's largest oil importer, has experienced economic decelerations, creating uncertainty regarding the demand for future energy. In addition, geopolitical tensions and persistent effects of Russia-Ukraine conflict have contributed to market volatility.
Despite these challenges, Shell has progressed in improving its financial position. The company has reduced its capital spending and net debt, while maintaining strong cash flows of operational activities. This has allowed Shell to launch a new shares of $ 3.5 billion shares and increase dividends by 4%.

But what follows?
Before his capital market day on March 25, Shell said he would seek to offer more value to shareholders while reducing emissions. The company revealed plans to increase shareholders distributions from 30-40% to 40-50% of the cash flow of operations, while maintaining an annual progressive dividend policy of 4%.
Shell also increased its structural cost reduction objective of $ 2 billion- $ 3 billion by the end of 2025 to a cumulative cost savings of $ 5 billion- $ 7 billion by the end of 2028, compared to the levels of 2022. The company also plans to reduce its annual capital expenses to $ 20 billion- $ 22 billion for 2025-2028, below $ 22B- $ 25 billion 2024 and 2025 guided in 2023.
In addition, the company aims to increase the free cash flow per share by more than 10% annually while maintaining a production of stable 1.4 m barrels per day. Meanwhile, CEO Wael Sawan sees that LNG sales grow by 4-5% per year to 2030.
However, the shell continues to depend on oil and gas prices. Now we are two months after the presidency of Donald Trump, a man who promised to keep oil prices low. The end of the war in Ukraine, which is also on its agenda, would probably see the normalization of supply routes and downward pressure on energy prices.
In summary, there are several reasons why oil, and possibly gas, prices remain lower during the next year and perhaps through Trump's presidency. Despite the reduction of benefits and increased yields, the broader economic perspective worries me. That is why I am transmitting Shell's actions for now.
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