Underlying profit at Shell has fallen by 16% year-on-year in the last financial year, reaching $23.7bn (£19bn).

The oil and gas giant also saw its underlying profit drop by 39% on a sequential basis to $3.6bn (£2.89bn).

Despite this drop, the group has been able to keep a good cash flow, reaching $8.7bn (£6.98bn) in the final quarter and almost $40bn (£32.1bn) in the full year.

Head of equity research at Hargreaves Lansdown, Derren Nathan, said: "The slowdown at the end of 2024 reflected lower margins in its trading businesses as well as the marketing division which includes its network of petrol forecourts. Lower oil prices also played their part. Exploration well write-offs were another headwind reflecting the increasing difficulty of discovering new sources of hydrocarbons.

"While net debt did tick up from Q3 levels to $38.8bn (£31.1bn), it fell 11% on a 12-month view. All in, this gave the board enough confidence to launch a fresh $3.5bn in buyback and with capital expenditure set to drop over 2025 investors can be hopeful of more to come."

Looking ahead, Shell said that its cash capital expenditure range for the 2025 financial year is expected to be lower than its 2024 range, which reached $21bn (£16.85bn).

However, the company has announced the launch of a $3.5bn (£2.81bn) share buyback scheme, with the purpose of reducing the issued share capital of the company.

It is set to last approximately three months, ending on 2 May, and after this period, all shares repurchased as part of the programme will be cancelled.

Nathan added: "Shell remains at a crossroads torn between the seemingly inevitable pull of the energy transition and the demands of shareholders. Its financial strength gives it the firepower to invest for the future as well as make generous distributions, but there are still some major doubts as to how the company plans to adapt to changing shifts in the energy mix.

"The next capital markets day in March should provide some more colour around the strategic direction of travel and is likely to be more closely watched than ever."

---