Shell

Post Reply
escveritas
Site Admin
Posts: 1041
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Singapore

Shell

Unread post by escveritas »

Royal Dutch Shell plc second quarter 2020 results announcement

Jul 30, 2020

On Thursday July 30, 2020 at 07:00 BST (08:00 CEST and 02:00 EDT) Royal Dutch Shell plc released its second quarter results and second interim dividend announcement for 2020.

CEO statement

Royal Dutch Shell Chief Executive Officer Ben van Beurden commented:

“Shell has delivered resilient cash flow in a remarkably challenging environment. We continue to focus on safe and reliable operations and our decisive cash preservation measures will underpin the strengthening of our balance sheet.
Our high-quality integrated portfolio, disciplined execution and forward-looking strategy enable sustained competitive free cash flow generation.”

Income attributable to Royal Dutch Shell plc shareholders was a loss of $18.1 billion for the second quarter 2020, which included an impairment charge of $16.8 billion post-tax ($22.3 billion pre-tax), as a result of revised medium- and longterm price and refining margin outlook assumptions in response to the COVID-19 pandemic and macroeconomic conditions as well as energy market demand and supply fundamentals. Second quarter 2020 results reflected lower realised prices for oil, LNG and gas, lower realised refining margins, Oil Products sales volumes and higher well write-offs,
compared with the second quarter 2019. This was partly offset by very strong crude and oil products trading and optimisation results as well as lower operating expenses.

Adjusted Earnings were $0.6 billion for the second quarter 2020, reflecting lower realised prices for oil, LNG and gas, lower realised refining margins, Oil Products sales volumes and higher well write-offs, compared with the second quarter 2019. This was partly offset by very strong crude and oil products trading and optimisation results as well as lower operating expenses.

Cash flow from operating activities for the second quarter 2020 was $2.6 billion, which included negative working capital movements of $4 billion. Cash flow from investing activities for the quarter was an outflow of $2.3 billion, driven mainly by capital expenditure, partly offset by proceeds from divestments.

Gearing was 32.7% at the end of the second quarter 2020, compared with 28.9% at the end of the first quarter 2020, mainly driven by the impact of impairments and pension remeasurement, due to actuarial assumption changes mainly caused by falling credit spreads and increasing market estimates of future inflation, as well as a net debt increase in the quarter.
Total dividends distributed to Royal Dutch Shell plc shareholders in the quarter were $1.2 billion
escveritas
Site Admin
Posts: 1041
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Singapore

Re: Shell 3Q 2020 Results

Unread post by escveritas »

Shell third quarter 2020 update note
Sep 30, 2020

This is an update to the third quarter 2020 outlook provided in the second quarter results announcement on July 30, 2020. The impacts presented here may vary from the actual results and are subject to finalisation of the third quarter 2020 results.

Unless otherwise indicated, presented impacts relate to Adjusted Earnings on a post-tax basis.

Integrated Gas
  • Production is expected to be between 820 and 860 thousand barrels of oil equivalent per day.
  • LNG liquefaction volumes are expected to be between 7.9 and 8.3 million tonnes.
  • Trading and optimisation results are expected to be below average.
  • A one-off tax charge is expected to have a negative impact on Adjusted Earnings in the range of $100 to $200 million, no cash impact is expected in the third quarter.
  • Approximately 80% of our term sales of LNG in 2020 have been oil price linked with a price-lag of up to 6 months. Consequently, lower realised prices due to this price-lag are expected to have a significant impact on LNG margins in the third quarter.
  • CFFO can be impacted by margining resulting from movements in the forward commodity curves up until the last day of the quarter. Margining inflows are expected to be in line with the second quarter 2020.
Upstream
  • Production is expected to be between 2,150 and 2,250 thousand barrels of oil equivalent per day, which includes a production impact of 60 to 70 thousand barrels of oil equivalent per day from hurricanes in the US Gulf of Mexico.
  • Realised liquids prices in the first two months of this quarter reflected a 15 to 20 percent discount to Brent, similar to the discount in the second quarter 2020. Realised gas prices are trending in line with Henry Hub.
  • Depreciation is expected to be at a similar level as in the second quarter 2020.
  • Similar to the second quarter 2020, while Adjusted Earnings are expected to show a loss, CFFO is not expected to reflect equivalent cash tax effects due to the build-up of deferred tax positions in a number of countries.
Oil Products
  • Refinery utilisation is expected to be between 64% and 68%.
  • Realised gross Refining margins are expected to be significantly lower compared with the second quarter 2020.
  • Sales volumes are expected to be between 4,000 and 5,000 thousand barrels per day.
  • Trading and optimisation results are expected to be lower than the historical average and significantly lower compared with the second quarter 2020.
  • Marketing margins are expected to be significantly higher compared with the second quarter 2020.
  • Compared with the second quarter 2020, Adjusted Earnings are expected to be negatively impacted by $200 to $400 million due to higher volume driven activity, phasing of maintenance activities and provisions.
  • A one-off deferred tax benefit is expected to have a positive impact on Adjusted Earnings of around $100 million, no cash impact is expected in the third quarter.
  • Working capital movements are typically impacted by movements between the quarter opening and closing price of crude along with changes in inventory volume. Inventory volumes are expected to be lower compared with the end of the second quarter 2020, impacting working capital positively.
Chemicals
  • Chemicals manufacturing plant utilisation is expected to be between 79% and 83%.
  • Chemicals sales volumes are expected to between 3,700 and 4,000 thousand tonnes.
  • Compared with the second quarter 2020, Adjusted Earnings are expected to be negatively impacted by around $100 million due to increased activity, provisions and phasing of maintenance activities.
Corporate
  • Corporate segment Adjusted Earnings are expected to be a net expense at the lower end of the $800 to $875 million range for the third quarter. This excludes the impact of currency exchange effects.
Other
  • As per previous disclosures, CFFO price sensitivity at Shell Group level is estimated to be $6 billion per annum for each $10 per barrel Brent price movement.
  • Note that this price sensitivity is indicative and is most applicable to smaller price changes than those in the current environment and in relation to the full-year results. This excludes the short-term impacts from working capital movements and cost-of-sales adjustments.
  • Post-tax impairment charges in the range of $1.0 to $1.5 billion are expected for the third quarter. Impairment charges are reported as identified items.
Consensus

The consensus collection for quarterly Adjusted Earnings and CFFO excluding working capital movements, managed by VARA research, is scheduled to be opened for submission on 8 October 2020, closed on 21 October 2020, and made public on 22 October 2020.

Recent publications

Two recent news publications are highlighted below. They do not to impact the third quarter 2020 results.
  • In an interview published today, Ben van Beurden, Chief Executive Officer of Royal Dutch Shell, discusses how Shell has responded to the COVID-19 pandemic, explains the drive behind the enhanced ambition to be a net-zero emissions energy business, and outlines the direction of the ongoing restructuring of Shell’s ways of working and organisation. Specifically, the simpler, streamlined and lower-cost organisation will focus on:
  • Upstream providing strong and resilient cash generation, focused on accelerating value;
  • reducing the Refining footprint to less than 10 sites, keeping those sites that are strategically essential in key locations, with flexibility to adapt and further integrate with the growing Chemicals and Trading businesses;
  • Integrated Gas having a larger focus on unlocking new and expanding existing LNG markets and furthering customer-led energy solutions; and a customer-focused organisation, providing lower and zero carbon solutions through the Integrated Power, Biofuels and Hydrogen businesses that are significant, competitive, and complement existing businesses like Marketing.
Reduced organisational complexity, along with other measures, are expected to deliver sustainable annual cost savings of between $2.0 to $2.5 billion by 2022. This will partially contribute to the announced underlying operating cost reduction of $3.0 to $4.0 billion by the first quarter 2021. Job reductions of 7,000 to 9,000 are expected (including around 1,500 people who have agreed to take voluntary redundancy this year) by the end of 2022.
escveritas
Site Admin
Posts: 1041
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Singapore

Re: Shell

Unread post by escveritas »

FOURTH QUARTER 2020 RESULTS – FEBRUARY 4, 2021

On Thursday February 4, 2021 at 07:00 GMT (08:00 CET and 02:00 EST) Royal Dutch Shell plc released its fourth quarter results and fourth interim dividend announcement for 2020.
“2020 was an extraordinary year. We have taken tough but decisive actions and demonstrated highly resilient operational delivery while caring for our people, customers and communities. We are coming out of 2020 with a stronger balance sheet, ready to accelerate our strategy and make the future of
energy. We are committed to our progressive dividend policy and expect to grow our US dollar dividend per share by around 4% as of the first quarter 2021.” Royal Dutch Shell Chief Executive Officer, Ben van Beurden
STRONG OPERATIONAL DELIVERY IN AN EXTRAORDINARY YEAR

▪ Resilient financial results, with sector-leading cash generation. Net debt reduced by $4 billion to $75 billion during 2020.
▪ Exceeded cash preservation targets set in March 2020:
▪ Cash capex decisively reduced to $18 billion in 2020, from $24 billion in 2019, against a target of $20 billion or lower.
▪ Underlying opex of $33 billion in 2020, down by $4 billion, from $37 billion in 2019, against a reduction target of $3 to $4 billion.
▪ The Board expects that the first quarter 2021 interim dividend will be US$0.1735 per share, an increase of ~4% over the US dollar dividend for the fourth quarter 2020

Q4 2020 FINANCIAL PERFORMANCE DRIVERS

Integrated Gas and New Energies

LNG realised prices significantly below Q4 2019, with some recovery seen during the quarter.
▪ Average trading and optimisation results.
▪ Lower opex driven by lower operations and maintenance costs as well as underlying structural cost reductions.
▪ Strong cash conversion despite derivatives cash outflow

OUTLOOK FOR Q1 2021

Production: 900 - 950 thousand boe/d

Upstream

▪ Lower prices, lower demand and unfavourable deferred tax movements driving lower Adjusted Earnings.
▪ Production 14% lower compared with Q4 2019 due to OPEC+ curtailments, divestments, higher maintenance, lower gas demand and hurricanes in US Gulf of Mexico.
▪ Lower opex driven by revisions to D&R provisions, divestments as well as underlying structural cost reductions.
▪ Strong cash conversion with CFFO excluding working capital contribution of $2.9 billion.

OUTLOOK FOR Q1 2021
Production: 2,400 - 2,600 thousand boe/d
Liquefaction volumes: 8.0 - 8.6 million tonnes

Oil Products

▪ Continued weakness in refining margins, despite some recovery from Q3 2020, lower intake and utilisation due to lower demand and Convent refinery shutdown.
▪ Strong Marketing unit margins offset by lower volumes due to COVID-19 second wave.
▪ Lower opex driven by lower maintenance costs and Marketing spend as well as underlying structural cost reductions.
▪ Trading and optimisation results significantly below average

OUTLOOK FOR Q1 2021
Sales volumes: 4,000 - 5,000 thousand b/d
Refinery utilisation: 73% - 81%

Chemicals

▪ Higher base and intermediate chemicals margins across most product segments.
▪ Higher JV income due to improved margins and demand in Asia.
▪ Strong cash conversion with CFFO excluding working capital contribution of $0.8 billion.

OUTLOOK FOR Q1 2021
Sales volumes: 3,600 - 3,900 thousand tonnes
Manufacturing plant utilisation: 80% - 88%

Q4 2020 FINANCIAL PERFORMANCE DRIVERS

▪ Net debt increased by $1.9 billion to $75.4 billion in Q4 2020. Impacted by lower free cash flow, including a small working capital outflow.

OUTLOOK FOR 2021
Adjusted Earnings: net expense of $2,400 - $2,800 million for the full year 2021. This excludes the impact of currency exchange rate effects.

Q4 2020 PORTFOLIO DEVELOPMENTS

▪ During the quarter, QGC Common Facilities Company Pty Ltd, a wholly-owned subsidiary of Shell, announced that it has agreed to the sale of a 26.25% interest in the Queensland Curtis LNG Common Facilities to Global Infrastructure Partners Australia for US$2.5 billion. The transaction is subject to regulatory approval in Australia and customary conditions and is expected to complete in the first half of 2021.

▪ In January 2021, Shell completed the sale of its 30% interest in Oil Mining Lease 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil and Gas Limited, a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc, for a consideration of $533 million. A total of $453 million was paid by completion with the balance to be paid over an agreed period.
escveritas
Site Admin
Posts: 1041
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Singapore

Re: Shell

Unread post by escveritas »

The Hague, April 29, 2021
“Shell has made a strong start to 2021, generating over $8 billion of cash in the quarter. Our integrated business model is ideally positioned to benefit from recovering demand. As previously announced, the first quarter 2021 dividend per share has been increased by around 4%, in line with our progressive dividend policy. We have reduced net debt by more than $4 billion this quarter, progressing towards the $65 billion milestone to increase shareholder distributions. Our competitive and robust financial performance provides the platform to achieve the goals of our Powering Progress strategy.” Royal Dutch Shell Chief Executive Officer, Ben van Beurden
First quarter 2021 income attributable to Royal Dutch Shell plc shareholders was $5.7 billion, which included net gains on sale of assets of $1.4 billion and gains of $0.4 billion due to the fair value accounting of commodity derivatives, partly offset by redundancy and restructuring charges of $0.5 billion, mainly related to the restructuring plan named Reshape.

Adjusted Earnings for the quarter were $3.2 billion. Cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders for the first quarter 2021 was negative $1.3 billion. The Texas winter storm had an impact on our operations and had an aggregate adverse impact of around $0.2 billion on Adjusted Earnings.

Cash flow from operating activities for the first quarter 2021 was $8.3 billion, which included negative working capital movements of $4.4 billion. Cash flow from investing activities for the quarter was an outflow of $0.6 billion, driven mainly by capital expenditure and partly offset by proceeds from sale of property, plant and equipment and businesses.

Compared with the fourth quarter 2020, current quarter Adjusted Earnings reflected higher realised oil and LNG prices, chemicals and refining margins, Oil Products trading contributions and lower depreciation.

Compared with the first quarter 2020, current quarter Adjusted Earnings reflected higher realised oil prices and chemicals margins partly offset by lower realised refining and marketing margins.

At the end of the first quarter 2021, net debt was $71.3 billion, compared with $75.4 billion at the end of the fourth quarter 2020, mainly driven by free cash flow generation in the quarter. Gearing was 29.9% at the end of the first quarter 2021, compared with 32.2% at the end of the fourth quarter 2020, mainly driven by net debt reduction, earnings and remeasurements of pensions.

Dividends declared to Royal Dutch Shell plc shareholders for the quarter amount to $0.1735 per share, an increase of around 4% from the last quarter. With effect from the first quarter 2021, business performance analysis of the current quarter compared with the previous quarter is introduced, which will replace, starting from the second quarter 2021, business performance analysis compared with the same quarter of the previous year. This change is introduced to enable better understanding of our business performance sequentially from quarter to quarter.

FIRST QUARTER 2021 PORTFOLIO DEVELOPMENTS

Integrated Gas

In March 2021, QGC Common Facilities Company Pty Ltd, a wholly-owned subsidiary of Shell, completed the sale of a 26.25% interest in the Queensland Curtis LNG (QCLNG) Common Facilities to Global Infrastructure Partners Australia for $2.5 billion, following the receipt of regulatory approval.

Upstream

In January 2021, Shell completed the sale of its 30% interest in Oil Mining Lease 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil and Gas Limited, a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc, for a consideration of $533 million. A total of $453 million was paid by completion with the balance to be paid over an agreed period.

In February 2021, an agreement was reached with publicly listed Canadian energy company Crescent Point Energy Corp. to sell the Duvernay shale light oil position in Alberta, Canada. The transaction completed on April 1, 2021. The consideration received consisted of $533 million in cash and 50 million shares in Crescent Point Energy common stock (TSX: CPG) valued at $208 million based on the closing price on March 31, 2021.

In March 2021, Shell Egypt and one of its affiliates signed an agreement with a consortium made up of subsidiaries of Cheiron Petroleum Corporation and Cairn Energy plc to acquire Shell’s upstream assets in Egypt’s Western Desert for a base consideration of $646 million and additional payments of up to $280 million between 2021 and 2024, contingent on the oil price and the results of further exploration. The transaction is subject to government and regulatory approvals and is expected to complete in the second half of 2021.

Downstream

First quarter segment earnings were $650 million. This included redundancy and restructuring costs of $284 million, which are part of identified items (see Reference A). Adjusted Earnings were $877 million.

Cash flow from operating activities for the first quarter 2021 was $893 million, primarily driven by Adjusted Earnings before depreciation and by cost-of-sales adjustments, partly offset by negative working capital movements of $2,420 million, and cash outflows for commodity derivatives of $200 million.

Compared with the fourth quarter 2020, Oil Products Adjusted Earnings reflected higher contributions from trading and optimisation, higher realised refining margins, and lower operating expenses. These were partly offset by the absence of the favourable deferred tax movements in the fourth quarter 2020.

Oil Products sales volumes decreased due to the impact of further lockdowns arising from COVID-19, and the Texas winter storm, compared with the fourth quarter 2020.

▪ Refining & Trading Adjusted Earnings reflected higher realised refining margins, and higher contributions from trading and optimisation. These were partly offset by the absence of the favourable deferred tax movements in the fourth quarter 2020.
▪ Marketing Adjusted Earnings reflected lower operating expenses.

Refinery utilisation remained at 72% compared with the fourth quarter 2020, with the impact of the Texas winter storm in the first quarter 2021, offset by the comparative effect of the Convent Refinery shutdown in the fourth quarter 2020.

Compared with the first quarter 2020, Oil Products Adjusted Earnings reflected lower realised refining and marketing margins due to a weaker macroeconomic environment and the COVID-19 pandemic.

▪ Refining & Trading Adjusted Earnings reflected lower realised refining margins, partly offset by lower depreciation.
▪ Marketing Adjusted Earnings reflected lower margins.

Refinery utilisation was 72% compared with 81% in the first quarter 2020, mainly due to lower demand and economic optimisation of the plants, as well as the impact of the Texas winter storm.

Chemicals

First quarter segment earnings were $689 million.

Cash flow from operating activities for the quarter was $324 million, primarily driven by Adjusted Earnings before depreciation as well as negative working capital movements of $721 million.

Compared with the fourth quarter 2020, Chemicals Adjusted Earnings reflected higher realised margins in base chemicals and intermediates from a stronger price environment.

Chemicals manufacturing plant utilisation remained at 79% compared with the fourth quarter 2020, with the impact of the Texas winter storm at the Deer Park site offsetting comparatively fewer maintenance activities.

Compared with the first quarter 2020, Chemicals Adjusted Earnings reflected higher realised margins in base chemicals and intermediates from a stronger price environment.

Chemicals manufacturing plant utilisation was 79% compared with 84% in the first quarter 2020, mainly due to the Texas winter storm.

OUTLOOK FOR THE SECOND QUARTER 2021

As a result of the COVID-19 pandemic, there continues to be significant uncertainty in the macroeconomic conditions with an expected negative impact on demand for oil, gas and related products. The second quarter 2021 outlook provides ranges for operational and financial metrics based on current expectations, but these are subject to change in the light of evolving market conditions. Due to demand or regulatory requirements and/or constraints in infrastructure, Shell may need to take measures to curtail or reduce oil and/or gas production, LNG liquefaction as well as utilisation of refining and chemicals plants and similarly sales volumes could be impacted. Such measures will likely have a variety of impacts on our operational and financial metrics.

Integrated Gas production is expected to be approximately 880 - 940 thousand boe/d. LNG liquefaction volumes are expected to be approximately 7.6 - 8.2 million tonnes.

Upstream production is expected to be approximately 2,150 - 2,350 thousand boe/d, reflecting lower seasonal gas demand and divestment impacts.

Refinery utilisation is expected to be approximately 73% - 81%.

Oil Products sales volumes are expected to be approximately 4,000 - 5,000 thousand b/d.

Chemicals manufacturing plant utilisation is expected to be approximately 76% - 84%.

Chemicals sales volumes are expected to be approximately 3,500 - 3,800 thousand tonnes.

Corporate Adjusted Earnings are expected to be a net expense of approximately $600 - $700 million in the second quarter 2021 and a net expense of approximately $2,400 - $2,800 million for the full year 2021. This excludes the impact of currency exchange rate effects.
Post Reply

Return to “Financial Results”

Who is online

Users browsing this forum: No registered users and 1 guest