ROYAL DUTCH SHELL PLC 3RD QUARTER 2021 UNAUDITED RESULTS
ROYAL DUTCH SHELL PLC |
SUMMARY OF UNAUDITED RESULTS | ||||||||||||||||||||||||||
Quarters | $ million | Nine months | ||||||||||||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | %¹ | Reference | 2021 | 2020 | % | |||||||||||||||||||
(447) | 3,428 | 489 | -113 | Income/(loss) attributable to shareholders | 8,640 | (17,666) | +149 | |||||||||||||||||||
(988) | 2,634 | 177 | -138 | CCS earnings attributable to shareholders | Note 2 | 5,992 | (15,443) | +139 | ||||||||||||||||||
4,130 | 5,534 | 955 | -25 | Adjusted Earnings² | A | 12,898 | 4,453 | +190 | ||||||||||||||||||
13,460 | 13,623 | 7,998 | Adjusted EBITDA (CCS basis) | A | 38,656 | 28,159 | ||||||||||||||||||||
16,025 | 12,617 | 10,403 | +27 | Cash flow from operating activities | 36,935 | 27,818 | +33 | |||||||||||||||||||
(3,804) | (2,946) | (2,833) | Cash flow from investing activities | (7,339) | (7,871) | |||||||||||||||||||||
12,221 | 9,671 | 7,571 | Free cash flow | G | 29,596 | 19,947 | ||||||||||||||||||||
4,840 | 4,383 | 3,737 | Cash capital expenditure | C | 13,197 | 12,324 | ||||||||||||||||||||
8,359 | 8,470 | 8,095 | -1 | Operating expenses | F | 26,264 | 25,137 | +4 | ||||||||||||||||||
8,696 | 8,505 | 7,854 | +2 | Underlying operating expenses | F | 25,924 | 23,958 | +8 | ||||||||||||||||||
2.9% | 3.2% | (4.9)% | ROACE (Net income basis) | D | 2.9% | (4.9)% | ||||||||||||||||||||
6.1% | 4.9% | 3.9% | ROACE on an Adjusted Earnings plus Non-controlling interest (NCI) basis | D | 6.1% | 3.9% | ||||||||||||||||||||
57,492 | 65,735 | 73,463 | Net debt | E | 57,492 | 73,463 | ||||||||||||||||||||
25.6% | 27.7% | 31.4% | Gearing | E | 25.6% | 31.4% | ||||||||||||||||||||
3,068 | 3,254 | 3,081 | -6 | Total production available for sale (thousand boe/d) | 3,269 | 3,392 | -4 | |||||||||||||||||||
(0.06) | 0.44 | 0.06 | -114 | Basic earnings per share ($) | 1.11 | (2.27) | +149 | |||||||||||||||||||
0.53 | 0.71 | 0.12 | -25 | Adjusted Earnings per share ($) | B | 1.66 | 0.57 | +191 | ||||||||||||||||||
0.24 | 0.24 | 0.1665 | — | Dividend per share ($) | 0.6535 | 0.4865 | +34 |
1. Q3 on Q2 change.
2. Adjusted Earnings is defined as income/(loss) attributable to shareholders plus cost of supplies adjustment (see Note 2) and excluding identified items (see Reference A).
Third quarter 2021 income attributable to Royal Dutch Shell plc shareholders was a loss of $0.4 billion, which included non-cash charges of $5.2 billion due to the fair value accounting of commodity derivatives and post-tax impairment charges of $0.3 billion, partly offset by net gains on sale of assets of $0.3 billion.
Adjusted Earnings for the quarter were $4.1 billion. Cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders for the third quarter 2021 was negative $0.5 billion. Hurricane Ida impacted our operations, with an aggregate adverse impact of around $0.4 billion on Adjusted Earnings.
Cash flow from operating activities for the third quarter 2021 was $16.0 billion, which included positive impacts of $4.0 billion from commodity derivatives partly offset by negative working capital movements of $1.4 billion. Cash flow from investing activities for the quarter was an outflow of $3.8 billion, mainly driven by capital expenditure and partly offset by proceeds from sale of property, plant and equipment and businesses.
Compared with the second quarter 2021, current quarter Adjusted Earnings reflected comparative adverse one-off tax impacts, lower production volumes partly due to the impact of Hurricane Ida, and comparative lower contributions from trading and optimisation. This was partly offset by higher oil, LNG and gas prices.
At the end of the third quarter 2021, net debt was $57.5 billion, compared with $65.7 billion at the end of the second quarter 2021, mainly driven by free cash flow generation in the quarter, partly offset by dividends and share buybacks. Gearing was 25.6% at the end of the third quarter 2021, compared with 27.7% at the end of the second quarter 2021, mainly driven by net debt reduction.
Dividends declared to Royal Dutch Shell plc shareholders for the quarter amount to $0.24 per share. During the quarter, $1.0 billion of share buybacks were completed out of a total target of $2 billion in the second half of 2021. Additional shareholder distributions of $7 billion related to the Permian sale to start in 2022, post deal completion.
ROYAL DUTCH SHELL PLC |
This announcement, together with supplementary financial and operational disclosure and a separate press release for this quarter, is available at www.shell.com/investors1.
1. Not incorporated by reference.
THIRD QUARTER 2021 PORTFOLIO DEVELOPMENTS
Integrated Gas
In July 2021, we signed a memorandum of understanding with Deutsche Telekom to advance digital innovation as both companies accelerate their transitions to net-zero emissions.
In July 2021, we started production on Block 5C in the East Coast Marine Area (ECMA) in Trinidad and Tobago.
Upstream
In July 2021, we announced the final investment decision for Whale, a deep-water development in the US Gulf of Mexico.
In August 2021, we announced a final investment decision taken by the Libra consortium, operated by Petrobras, to contract the Mero-4 floating production, storage and offloading vessel to be deployed at the Mero field in offshore Brazil.
In August 2021, we announced a final investment decision on the Timi gas development project in Malaysia.
In September 2021, we reached an agreement for the sale of the Permian business in the USA for a base consideration of $9.5 billion in cash. The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions to start in 2022, post deal completion, with the remainder used for further strengthening of the balance sheet.
In September 2021, we completed the sale of upstream assets in Egypt’s Western Desert for a base consideration of $646 million.
Oil Products
In July 2021, we announced the start-up of Europe's largest polymer electrolyte membrane hydrogen electrolyser at the Energy and Chemicals Park Rheinland, Germany, producing green hydrogen.
In July 2021, we reached an agreement for the sale of the non-operated 37.5% shareholding in the Germany PCK Schwedt Refinery.
In August 2021, we marked the start of trading in shares of Raízen S.A. on the São Paulo Stock Exchange (B3), following the successful execution of an initial public offering.
In September 2021, we announced a final investment decision to build an 820,000-tonnes-a-year biofuels facility at the Energy and Chemicals Park Rotterdam, Netherlands.
In October 2021, we signed an agreement to acquire 248 company-owned fuel and convenience retail sites from the Landmark group of companies, whose convenience stores operate in Texas under the Timewise brand. The agreement also includes supply agreements with an additional 117 independently operated fuel and convenience sites.
Page 2
ROYAL DUTCH SHELL PLC |
PERFORMANCE BY SEGMENT
INTEGRATED GAS | ||||||||||||||||||||||||||
Quarters | $ million | Nine months | ||||||||||||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | %¹ | Reference | 2021 | 2020 | % | |||||||||||||||||||
(3,247) | 422 | (151) | -869 | Segment earnings | (297) | (6,298) | +95 | |||||||||||||||||||
(4,927) | (1,187) | (920) | Of which: Identified items | A | (5,002) | (9,572) | ||||||||||||||||||||
1,680 | 1,609 | 768 | +4 | Adjusted Earnings | A | 4,705 | 3,274 | +44 | ||||||||||||||||||
3,768 | 3,364 | 2,349 | Adjusted EBITDA (CCS basis) | A | 10,339 | 8,999 | ||||||||||||||||||||
5,674 | 3,761 | 2,323 | +51 | Cash flow from operating activities | 11,926 | 8,972 | +33 | |||||||||||||||||||
7,871 | 4,350 | 2,396 | +81 | Cash flow from operating activities excluding working capital movements | H | 15,874 | 8,619 | +84 | ||||||||||||||||||
1,272 | 880 | 1,020 | Cash capital expenditure | C | 3,167 | 2,638 | ||||||||||||||||||||
166 | 162 | 143 | +2 | Liquids production available for sale (thousand b/d) | 166 | 152 | +9 | |||||||||||||||||||
4,476 | 4,502 | 4,067 | -1 | Natural gas production available for sale (million scf/d) | 4,532 | 4,343 | +4 | |||||||||||||||||||
938 | 938 | 844 | 0 | Total production available for sale (thousand boe/d) | 947 | 901 | +5 | |||||||||||||||||||
7.39 | 7.49 | 7.80 | -1 | LNG liquefaction volumes (million tonnes) | 23.04 | 25.03 | -8 | |||||||||||||||||||
15.18 | 15.92 | 17.63 | -5 | LNG sales volumes (million tonnes) | 47.48 | 54.73 | -13 |
1.Q3 on Q2 change.
Third quarter segment earnings amounted to a loss of $3,247 million and Adjusted Earnings for the quarter were $1,680 million. As part of our normal business, commodity derivative hedge contracts are entered into for mitigation of future purchases, sales and inventory. As these commodity derivatives are fair value accounted for, this creates an accounting mismatch over periods. As a result, this quarter included losses of $4,929 million due to the fair value accounting of commodity derivatives (primarily due to gas price developments) and are part of identified items (see Reference A).
Cash flow from operating activities excluding working capital movements for the quarter was $7,871 million, primarily driven by Adjusted EBITDA of $3,768 million and derivatives cash inflows of $4,280 million driven by variation margin in gas and power trading due to significant gas and electricity price increases. As these variation margin cash inflows reflect underlying hedges, this effect could reverse in future quarters.
Compared with the second quarter 2021, Integrated Gas Adjusted Earnings primarily reflected higher realised prices for LNG, oil and gas. This was partly offset by comparative lower earnings contribution from the Renewables & Energy Solutions business due to lower margins in North America and comparative adverse one-off tax impacts.
Compared with the second quarter 2021, total oil and gas production remained at a similar level due to lower maintenance activities, offset by field decline and lower demand. LNG liquefaction volumes decreased by 1% due to feedgas constraints and cargo timing, partly offset by lower maintenance activities.
Nine months segment earnings amounted to a loss of $297 million. This included losses of $5,447 million due to the fair value accounting of commodity derivatives. These are mainly related to gas and power trading in Europe to hedge supply and purchase contracts as well as inventory and to physical future global LNG sales that are partially hedged through paper derivative positions. There were also post-tax impairment charges of $588 million, partly offset by gains on sale of assets of $1,094 million. These gains and losses are part of identified items (see Reference A). Adjusted Earnings for the nine months were $4,705 million.
Cash flow from operating activities excluding working capital movements for the first nine months of 2021 was $15,874 million, primarily driven by Adjusted EBITDA of $10,339 million and cash inflows of $6,768 million from commodity derivatives.
Compared with the first nine months 2020, Integrated Gas Adjusted Earnings primarily reflected higher realised prices for oil, gas and LNG as well as one-off favourable tax impacts. This was partly offset by lower contributions from trading and optimisation.
Compared with the first nine months 2020, total oil and gas production increased by 5% mainly due to the restart of production at the Prelude floating LNG operations in Australia, production sharing contract effects and increased demand, partly offset by field decline. LNG liquefaction volumes decreased by 8% due to feedgas constraints and higher maintenance activities, partly offset by the restart of production at the Prelude floating LNG operations in Australia.
Page 3
ROYAL DUTCH SHELL PLC |
UPSTREAM | ||||||||||||||||||||||||||
Quarters | $ million | Nine months | ||||||||||||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | %¹ | Reference | 2021 | 2020 | % | |||||||||||||||||||
1,274 | 2,415 | (1,110) | -47 | Segment earnings | 4,786 | (8,694) | +155 | |||||||||||||||||||
(412) | (53) | (226) | Of which: Identified items | A | (332) | (6,590) | ||||||||||||||||||||
1,686 | 2,469 | (884) | -32 | Adjusted Earnings | A | 5,118 | (2,104) | +343 | ||||||||||||||||||
6,766 | 6,714 | 2,911 | Adjusted EBITDA (CCS basis) | A | 18,866 | 9,421 | ||||||||||||||||||||
5,777 | 5,056 | 2,101 | +14 | Cash flow from operating activities | 14,940 | 8,026 | +86 | |||||||||||||||||||
5,889 | 5,444 | 2,629 | +8 | Cash flow from operating activities excluding working capital movements | H | 16,035 | 6,894 | +133 | ||||||||||||||||||
1,502 | 1,696 | 1,245 | Cash capital expenditure | C | 4,732 | 5,642 | ||||||||||||||||||||
1,497 | 1,558 | 1,520 | -4 | Liquids production available for sale (thousand b/d) | 1,544 | 1,619 | -5 | |||||||||||||||||||
3,387 | 4,082 | 3,960 | -17 | Natural gas production available for sale (million scf/d) | 4,192 | 4,768 | -12 | |||||||||||||||||||
2,081 | 2,262 | 2,203 | -8 | Total production available for sale (thousand boe/d) | 2,267 | 2,441 | -7 |
1. Q3 on Q2 change.
Third quarter segment earnings were $1,274 million. This included a net charge of $192 million related to the impact of the weakening Brazilian real on a deferred tax position, losses of $181 million due to the fair value accounting of commodity derivatives and post-tax impairment charges of $116 million, partly offset by a gain of $51 million related to remeasurement of redundancy and restructuring costs. These net losses are part of identified items (see Reference A). Adjusted Earnings were $1,686 million.
Cash flow from operating activities for the quarter was $5,777 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, partly offset by negative working capital movements.
Compared with the second quarter 2021, Upstream Adjusted Earnings reflected the comparative adverse impact of a one-off release of a tax provision in Nigeria in the second quarter, higher well write-offs and lower volumes. These were partly offset by higher realised oil and gas prices.
Compared with the second quarter 2021, total production decreased by 8%, mainly due to the effects of Hurricane Ida and unfavourable seasonal effects.
Nine months segment earnings were $4,786 million. This included losses of $378 million due to the fair value accounting of commodity derivatives, a net charge of $99 million related to the impact of the weakening Brazilian real on a deferred tax position, and post-tax impairment charges of $72 million, partly offset by a net gain of $240 million related to the sale of assets. These net gains are part of identified items (see Reference A). Adjusted Earnings were $5,118 million.
Cash flow from operating activities for the first nine months of 2021 was $14,940 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, partly offset by negative working capital movements.
Compared with the first nine months 2020, Upstream Adjusted Earnings reflected higher realised oil and gas prices, the one-off release of a tax provision in Nigeria and lower depreciation.
Compared with the first nine months 2020, total production decreased by 7%, mainly due to the impact of divestments and higher maintenance activities.
Page 4
ROYAL DUTCH SHELL PLC |
OIL PRODUCTS | ||||||||||||||||||||||||||
Quarters | $ million | Nine months | ||||||||||||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | %¹ | Reference | 2021 | 2020 | % | |||||||||||||||||||
1,362 | 33 | 2,092 | +4065 | Segment earnings² | 2,044 | 1,281 | +60 | |||||||||||||||||||
150 | (1,267) | 411 | Of which: Identified items | A | (1,344) | (4,174) | ||||||||||||||||||||
1,212 | 1,299 | 1,680 | -7 | Adjusted Earnings² | A | 3,389 | 5,454 | -38 | ||||||||||||||||||
Of which: | ||||||||||||||||||||||||||
(3) | 112 | 55 | -102 | Refining & Trading³ | 5 | 1,713 | -100 | |||||||||||||||||||
1,215 | 1,187 | 1,626 | +2 | Marketing³ | 3,384 | 3,742 | -10 | |||||||||||||||||||
2,360 | 2,608 | 2,520 | Adjusted EBITDA (CCS basis) | A | 7,080 | 9,134 | ||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||
415 | 676 | 228 | Refining & Trading³ | 1,558 | 3,425 | |||||||||||||||||||||
1,945 | 1,932 | 2,293 | Marketing³ | 5,522 | 5,710 | |||||||||||||||||||||
3,757 | 2,213 | 5,131 | +70 | Cash flow from operating activities | 6,863 | 9,647 | -29 | |||||||||||||||||||
3,262 | 3,365 | 3,476 | -3 | Cash flow from operating activities excluding working capital movements | H | 9,939 | 6,259 | +59 | ||||||||||||||||||
976 | 882 | 832 | Cash capital expenditure | C | 2,527 | 2,019 | ||||||||||||||||||||
1,629 | 1,833 | 1,972 | -11 | Refinery processing intake (thousand b/d) | 1,737 | 2,104 | -17 | |||||||||||||||||||
4,665 | 4,552 | 4,740 | +3 | Oil Products sales volumes (thousand b/d) | 4,462 | 4,686 | -5 |
1. Q3 on Q2 change.
2. Earnings are presented on a CCS basis (see Note 2).
3. With effect from Q1 2021, changes are made in the cost and activity allocation between Marketing and Refining & Trading. This resulted in a net Q3 2021 charge of $120 million (nine months 2021: $339 million) to Refining & Trading, with an offsetting amount in Marketing. This change does not impact consolidated Oil Products Adjusted Earnings.
Third quarter segment earnings were $1,362 million. This included a gain of $301 million related to the dilution of interest in the Raizen joint venture, partly offset by post-tax impairment charges of $138 million. These net gains are part of identified items (see Reference A). Adjusted Earnings were $1,212 million.
Cash flow from operating activities for the third quarter 2021 was $3,757 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, as well as positive working capital movements due to lower volumes held in inventory.
Compared with the second quarter 2021, Oil Products Adjusted Earnings reflected lower contributions from trading and optimisation, partly offset by favourable deferred tax movements.
Oil Products sales volumes increased due to favourable seasonal effects and continued demand recovery.
•Refining & Trading Adjusted Earnings reflected lower refinery processing intake and utilisation due to planned maintenance and the impact of Hurricane Ida, as well as lower contributions from trading and optimisation.
•Marketing Adjusted Earnings reflected higher sales volumes.
Refinery utilisation was 71% compared with 76% in the second quarter 2021, due to higher planned maintenance and the impact of Hurricane Ida.
Nine months segment earnings were $2,044 million. This included post-tax impairment charges of $1,268 million, losses of $158 million due to the fair value accounting of commodity derivatives, and redundancy and restructuring costs of $134 million, partly offset by a gain of $301 million related to the dilution of interest in the Raizen joint venture. These net losses are part of identified items (see Reference A). Adjusted Earnings were $3,389 million.
Cash flow from operating activities for the first nine months of 2021 was $6,863 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, partly offset by negative working capital movements and cash outflows for commodity derivatives.
Page 5
ROYAL DUTCH SHELL PLC |
Compared with the first nine months 2020, Oil Products Adjusted Earnings reflected lower contributions from trading and optimisation and higher operating expenses. These were partly offset by higher marketing volumes and Oil Sands margins.
Oil Products sales volumes decreased due to lower trading volumes compared with the first nine months of 2020.
•Refining & Trading Adjusted Earnings reflected lower contributions from trading and optimisation and higher operating expenses. These were partly offset by higher Oil Sands margins and lower depreciation.
•Marketing Adjusted Earnings reflected higher operating expenses and favourable tax impacts in the first nine months of 2020, offset by higher sales volumes.
Refinery utilisation was 73% compared with 72% in the first nine months of 2020.
Page 6
ROYAL DUTCH SHELL PLC |
CHEMICALS | ||||||||||||||||||||||||||
Quarters | $ million | Nine months | ||||||||||||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | %¹ | Reference | 2021 | 2020 | % | |||||||||||||||||||
357 | 462 | 131 | -23 | Segment earnings² | 1,509 | 441 | +242 | |||||||||||||||||||
(38) | (208) | (96) | Of which: Identified items | A | (286) | (140) | ||||||||||||||||||||
395 | 670 | 227 | -41 | Adjusted Earnings² | A | 1,795 | 581 | +209 | ||||||||||||||||||
715 | 1,036 | 466 | Adjusted EBITDA (CCS basis) | A | 2,792 | 1,439 | ||||||||||||||||||||
840 | 1,133 | 335 | -26 | Cash flow from operating activities | 2,297 | 891 | +158 | |||||||||||||||||||
684 | 1,225 | 488 | -44 | Cash flow from operating activities excluding working capital movements | H | 2,953 | 981 | +201 | ||||||||||||||||||
1,053 | 895 | 595 | Cash capital expenditure | C | 2,678 | 1,810 | ||||||||||||||||||||
3,549 | 3,609 | 3,823 | -2 | Chemicals sales volumes (thousand tonnes) | 10,741 | 11,318 | -5 |
1. Q3 on Q2 change.
2. Earnings are presented on a CCS basis (see Note 2).
Third quarter segment earnings were $357 million. This included post-tax impairment charges, and a legal provision. These net losses are part of identified items (see Reference A). Adjusted earnings were $395 million.
Cash flow from operating activities for the quarter was $840 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, as well as positive working capital movements, partly offset by the timing impact of dividends from Joint Ventures and Associates.
Compared with the second quarter 2021, Chemicals Adjusted Earnings reflected the operational impact of Hurricane Ida, lower intermediate and base chemicals margins, as well as lower income from Joint Ventures and Associates.
Chemicals manufacturing plant utilisation was 78% compared with 82% in the second quarter 2021, due to the impact of Hurricane Ida and higher planned maintenance.
Nine months segment earnings were $1,509 million. This included post-tax impairment charges of $227 million, and legal provisions of $37 million. These net losses are part of identified items (see Reference A). Adjusted earnings were $1,795 million.
Cash flow from operating activities for the first nine months was $2,297 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, partly offset by negative working capital movements.
Compared with the first nine months 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 81% for the first nine months 2020 due to the impact of Hurricane Ida.
Page 7
ROYAL DUTCH SHELL PLC |
CORPORATE | ||||||||||||||||||||
Quarters | $ million | Nine months | ||||||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | Reference | 2021 | 2020 | |||||||||||||||
(623) | (592) | (739) | Segment earnings | (1,747) | (1,998) | |||||||||||||||
109 | (193) | 52 | Of which: Identified items | A | 50 | 578 | ||||||||||||||
(732) | (399) | (792) | Adjusted Earnings | A | (1,797) | (2,576) | ||||||||||||||
(147) | (101) | (247) | Adjusted EBITDA (CCS basis) | A | (421) | (834) | ||||||||||||||
(22) | 454 | 514 | Cash flow from operating activities | 909 | 282 | |||||||||||||||
(233) | (208) | (33) | Cash flow from operating activities excluding working capital movements | H | (471) | 118 |
Third quarter segment earnings were an expense of $623 million. This included a gain of $108 million from the deferred tax impact of the weakening Brazilian real on financing positions, which is part of identified items (see Reference A). Adjusted Earnings were a net expense of $732 million.
Compared with the second quarter 2021, Adjusted Earnings reflected unfavourable movements in tax credits and currency exchange rate effects, partly offset by lower operating and net interest expenses.
Nine months segment earnings were an expense of $1,747 million. This included a gain of $50 million from the deferred tax impact of the weakening Brazilian real on financing positions, which is part of identified items (see Reference A). Adjusted Earnings were a net expense of $1,797 million.
Compared with the first nine months 2020, Adjusted Earnings reflected lower net interest expense and favourable currency exchange rate effects.
OUTLOOK FOR THE FOURTH QUARTER 2021
Cash capital expenditure was $13.2 billion for the first nine months 2021 and is expected to be around $20 billion for the full year 2021.
Integrated Gas production is expected to be approximately 940 - 980 thousand boe/d and LNG liquefaction volumes are expected to benefit from lower maintenance activities and be approximately 8.0 - 8.6 million tonnes.
Upstream production is expected to be approximately 2,100 - 2,350 thousand boe/d.
Refinery utilisation is expected to be approximately 68% - 76%.
Oil Products sales volumes are expected to be approximately 4,200 - 5,200 thousand b/d.
Chemicals manufacturing plant utilisation is expected to be approximately 73% - 81%.
Chemicals sales volumes are expected to be approximately 3,500 - 3,900 thousand tonnes.
Corporate Adjusted Earnings are expected to be a net expense of approximately $650 - $750 million in the fourth quarter 2021 and a net expense of approximately $2,450 - $2,550 million for the full year 2021. This excludes the impact of currency exchange rate effects.
Page 8
ROYAL DUTCH SHELL PLC |
FORTHCOMING EVENTS
Fourth quarter 2021 and full year results and dividends are scheduled to be announced on February 3, 2022. First quarter 2022 results and dividends are scheduled to be announced on May 5, 2022. Second quarter 2022 and half year results and dividends are scheduled to be announced on July 28, 2022. Third quarter 2022 results and dividends are scheduled to be announced on October 27, 2022.
Page 9
ROYAL DUTCH SHELL PLC |
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME | |||||||||||||||||
Quarters | $ million | Nine months | |||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | 2021 | 2020 | |||||||||||||
60,044 | 60,515 | 44,021 | Revenue¹ | 176,224 | 136,554 | ||||||||||||
1,014 | 1,114 | 461 | Share of profit of joint ventures and associates | 3,122 | 1,154 | ||||||||||||
497 | 134 | 234 | Interest and other income² | 3,087 | 458 | ||||||||||||
61,555 | 61,764 | 44,717 | Total revenue and other income | 182,434 | 138,167 | ||||||||||||
44,260 | 39,717 | 27,276 | Purchases | 118,346 | 88,582 | ||||||||||||
5,322 | 5,162 | 5,496 | Production and manufacturing expenses | 17,292 | 17,299 | ||||||||||||
2,892 | 3,107 | 2,366 | Selling, distribution and administrative expenses | 8,461 | 7,130 | ||||||||||||
145 | 201 | 233 | Research and development | 511 | 708 | ||||||||||||
526 | 332 | 222 | Exploration | 1,143 | 1,239 | ||||||||||||
6,358 | 8,223 | 7,689 | Depreciation, depletion and amortisation² | 20,477 | 42,871 | ||||||||||||
859 | 893 | 992 | Interest expense | 2,643 | 3,181 | ||||||||||||
60,362 | 57,634 | 44,275 | Total expenditure | 168,874 | 161,009 | ||||||||||||
1,193 | 4,130 | 442 | Income/(loss) before taxation | 13,560 | (22,842) | ||||||||||||
1,510 | 571 | (104) | Taxation charge/(credit) | 4,535 | (5,265) | ||||||||||||
(317) | 3,559 | 546 | Income/(loss) for the period¹ | 9,025 | (17,578) | ||||||||||||
130 | 131 | 57 | Income/(loss) attributable to non-controlling interest | 385 | 88 | ||||||||||||
(447) | 3,428 | 489 | Income/(loss) attributable to Royal Dutch Shell plc shareholders | 8,640 | (17,666) | ||||||||||||
(0.06) | 0.44 | 0.06 | Basic earnings per share ($)³ | 1.11 | (2.27) | ||||||||||||
(0.06) | 0.44 | 0.06 | Diluted earnings per share ($)³ | 1.10 | (2.27) |
1. See Note 2 “Segment information”.
2. See Note 7 “Other notes to the unaudited Condensed Consolidated Interim Financial Statements”.
3. See Note 3 “Earnings per share”.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||||||||||||||||
Quarters | $ million | Nine months | |||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | 2021 | 2020 | |||||||||||||
(317) | 3,559 | 546 | Income/(loss) for the period | 9,025 | (17,578) | ||||||||||||
Other comprehensive income/(loss) net of tax: | |||||||||||||||||
Items that may be reclassified to income in later periods: | |||||||||||||||||
(943) | 575 | 1,246 | – Currency translation differences | (1,219) | (1,101) | ||||||||||||
(1) | (2) | 5 | – Debt instruments remeasurements | (17) | 20 | ||||||||||||
102 | (84) | 75 | – Cash flow hedging gains/(losses) | 150 | (214) | ||||||||||||
89 | (51) | (153) | – Net investment hedging gains/(losses) | 209 | (253) | ||||||||||||
16 | (20) | (59) | – Deferred cost of hedging | (38) | 97 | ||||||||||||
(104) | (7) | (51) | – Share of other comprehensive income/(loss) of joint ventures and associates | (167) | (80) | ||||||||||||
(841) | 410 | 1,063 | Total | (1,083) | (1,530) | ||||||||||||
Items that are not reclassified to income in later periods: | |||||||||||||||||
291 | 1,675 | (580) | – Retirement benefits remeasurements | 6,594 | (3,747) | ||||||||||||
(25) | 10 | 36 | – Equity instruments remeasurements | 25 | (24) | ||||||||||||
41 | (42) | 45 | – Share of other comprehensive income/(loss) of joint ventures and associates | (26) | 112 | ||||||||||||
307 | 1,643 | (499) | Total | 6,592 | (3,659) | ||||||||||||
(534) | 2,053 | 564 | Other comprehensive income/(loss) for the period | 5,510 | (5,189) | ||||||||||||
(851) | 5,612 | 1,111 | Comprehensive income/(loss) for the period | 14,535 | (22,767) | ||||||||||||
85 | 145 | 82 | Comprehensive income/(loss) attributable to non-controlling interest | 351 | 2 | ||||||||||||
(937) | 5,467 | 1,029 | Comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders | 14,184 | (22,768) |
Page 10
ROYAL DUTCH SHELL PLC |
CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||
$ million | ||||||||
September 30, 2021 | December 31, 2020 4 | |||||||
Assets | ||||||||
Non-current assets | ||||||||
Intangible assets | 22,344 | 22,710 | ||||||
Property, plant and equipment | 196,261 | 209,700 | ||||||
Joint ventures and associates | 23,724 | 22,451 | ||||||
Investments in securities | 3,662 | 3,222 | ||||||
Deferred tax | 14,542 | 16,311 | ||||||
Retirement benefits1 | 8,009 | 2,474 | ||||||
Trade and other receivables | 7,605 | 7,641 | ||||||
Derivative financial instruments² | 1,052 | 2,805 | ||||||
277,199 | 287,315 | |||||||
Current assets | ||||||||
Inventories | 24,596 | 19,457 | ||||||
Trade and other receivables | 46,366 | 33,625 | ||||||
Derivative financial instruments² | 14,613 | 5,783 | ||||||
Cash and cash equivalents | 38,073 | 31,830 | ||||||
123,648 | 90,695 | |||||||
Assets classified as held for sale1 | 7,922 | 1,258 | ||||||
131,570 | 91,953 | |||||||
Total assets | 408,769 | 379,268 | ||||||
Liabilities | ||||||||
Non-current liabilities | ||||||||
Debt | 84,705 | 91,115 | ||||||
Trade and other payables | 2,224 | 2,304 | ||||||
Derivative financial instruments² | 571 | 420 | ||||||
Deferred tax | 12,159 | 10,463 | ||||||
Retirement benefits1,3 | 11,835 | 15,605 | ||||||
Decommissioning and other provisions | 26,361 | 27,116 | ||||||
137,856 | 147,023 | |||||||
Current liabilities | ||||||||
Debt | 10,686 | 16,899 | ||||||
Trade and other payables³ | 59,722 | 44,572 | ||||||
Derivative financial instruments² | 26,118 | 5,308 | ||||||
Income taxes payable³ | 2,809 | 3,111 | ||||||
Decommissioning and other provisions | 3,139 | 3,622 | ||||||
102,473 | 73,512 | |||||||
Liabilities directly associated with assets classified as held for sale1 | 1,758 | 196 | ||||||
104,230 | 73,708 | |||||||
Total liabilities | 242,086 | 220,731 | ||||||
Equity attributable to Royal Dutch Shell plc shareholders | 163,390 | 155,310 | ||||||
Non-controlling interest | 3,293 | 3,227 | ||||||
Total equity | 166,683 | 158,537 | ||||||
Total liabilities and equity | 408,769 | 379,268 |
1. See Note 7 "Other notes to the unaudited Condensed Consolidated Interim Financial Statements".
2. See Note 6 “Derivative financial instruments and debt excluding lease liabilities”.
3. As from January 1, 2021 the 'Retirement benefits' liability has been classified under non-current liabilities (previously partly presented within current liabilities) and taxes payable not related to income tax are presented within 'Trade and other payables' (previously 'Taxes payable'). Prior period comparatives have been revised to conform with current year presentation. See Note 7.
Page 11
ROYAL DUTCH SHELL PLC |
4. For Q3 2021, assets held for sale are presented separately. Prior period comparatives have been revised to conform with current year presentation.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | |||||||||||||||||||||||
Equity attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||||||||
$ million | Share capital¹ | Shares held in trust | Other reserves² | Retained earnings | Total | Non-controlling interest | Total equity | ||||||||||||||||
At January 1, 2021 | 651 | (709) | 12,752 | 142,616 | 155,310 | 3,227 | 158,537 | ||||||||||||||||
Comprehensive income/(loss) for the period | — | — | 5,544 | 8,640 | 14,184 | 351 | 14,535 | ||||||||||||||||
Transfer from other comprehensive income | — | — | (14) | 14 | — | — | — | ||||||||||||||||
Dividends³ | — | — | — | (4,475) | (4,475) | (305) | (4,780) | ||||||||||||||||
Repurchases of shares4 | (4) | — | 4 | (2,003) | (2,003) | — | (2,003) | ||||||||||||||||
Share-based compensation | — | 350 | (68) | 93 | 375 | — | 375 | ||||||||||||||||
Other changes in non-controlling interest | — | — | — | (1) | (1) | 20 | 19 | ||||||||||||||||
At September 30, 2021 | 647 | (359) | 18,218 | 144,884 | 163,390 | 3,293 | 166,683 | ||||||||||||||||
At January 1, 2020 | 657 | (1,063) | 14,451 | 172,431 | 186,476 | 3,987 | 190,463 | ||||||||||||||||
Comprehensive income/(loss) for the period | — | — | (5,102) | (17,666) | (22,768) | 2 | (22,767) | ||||||||||||||||
Transfer from other comprehensive income | — | — | 185 | (185) | — | — | — | ||||||||||||||||
Dividends3 | — | — | — | (5,956) | (5,956) | (242) | (6,198) | ||||||||||||||||
Repurchases of shares | (6) | — | 6 | (1,214) | (1,214) | — | (1,214) | ||||||||||||||||
Share-based compensation | — | 539 | (237) | (230) | 73 | — | 73 | ||||||||||||||||
Other changes in non-controlling interest | — | — | — | 557 | 557 | (573) | (16) | ||||||||||||||||
At September 30, 2020 | 651 | (523) | 9,303 | 147,737 | 157,168 | 3,173 | 160,341 |
1. See Note 4 “Share capital”.
2. See Note 5 “Other reserves”.
3. The amount charged to retained earnings is based on prevailing exchange rates on payment date.
4. Includes shares committed to repurchase and repurchases subject to settlement at the end of the quarter.
Page 12
ROYAL DUTCH SHELL PLC |
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||||||||
Quarters | $ million | Nine months | |||||||||||||||
Q3 2021 | Q2 2021 | Q3 2020 | 2021 | 2020 | |||||||||||||
1,193 | 4,130 | 442 | Income before taxation for the period | 13,560 | (22,842) | ||||||||||||
Adjustment for: | |||||||||||||||||
723 | 797 | 814 | – Interest expense (net) | 2,277 | 2,600 | ||||||||||||
6,358 | 8,223 | 7,689 | – Depreciation, depletion and amortisation | 20,477 | 42,871 | ||||||||||||
323 | 108 | 14 | – Exploration well write-offs | 567 | 615 | ||||||||||||
(298) | 55 | (103) | – Net (gains)/losses on sale and revaluation of non-current assets and businesses | (2,316) | (124) | ||||||||||||
(1,014) | (1,114) | (461) | – Share of (profit)/loss of joint ventures and associates | (3,122) | (1,154) | ||||||||||||
956 | 782 | 468 | – Dividends received from joint ventures and associates | 2,318 | 1,609 | ||||||||||||
(538) | (2,495) | 405 | – (Increase)/decrease in inventories | (6,459) | 6,286 | ||||||||||||
(2,859) | (4,080) | (540) | – (Increase)/decrease in current receivables | (13,768) | 9,733 | ||||||||||||
1,950 | 5,016 | 1,583 | – Increase/(decrease) in current payables | 12,831 | (11,073) | ||||||||||||
10,116 | 2,173 | 233 | – Derivative financial instruments | 12,474 | 899 | ||||||||||||
(113) | 47 | 152 | – Retirement benefits | 43 | 355 | ||||||||||||
(206) | (124) | 43 | – Decommissioning and other provisions | (252) | 333 | ||||||||||||
894 | 561 | 265 | – Other | 2,038 | 363 | ||||||||||||
(1,459) | (1,465) | (601) | Tax paid | (3,733) | (2,653) | ||||||||||||
16,025 | 12,617 | 10,403 | Cash flow from operating activities | 36,935 | 27,818 | ||||||||||||
(4,648) | (4,232) | (3,679) | Capital expenditure | (12,764) | (11,379) | ||||||||||||
(151) | (115) | (34) | Investments in joint ventures and associates | (335) | (754) | ||||||||||||
(41) | (36) | (23) | Investments in equity securities | (98) | (190) | ||||||||||||
1,122 | 1,162 | 571 | Proceeds from sale of property, plant and equipment and businesses | 5,390 | 2,395 | ||||||||||||
168 | 4 | 159 | Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans1 | 447 | 1,129 | ||||||||||||
6 | 108 | 139 | Proceeds from sale of equity securities | 145 | 274 | ||||||||||||
93 | 110 | 112 | Interest received | 302 | 422 | ||||||||||||
929 | 799 | 588 | Other investing cash inflows | 2,440 | 2,617 | ||||||||||||
(1,283) | (746) | (665) | Other investing cash outflows | (2,866) | (2,384) | ||||||||||||
(3,804) | (2,946) | (2,833) | Cash flow from investing activities | (7,339) | (7,871) | ||||||||||||
(33) | (34) | (176) | Net increase/(decrease) in debt with maturity period within three months | 46 | 236 | ||||||||||||
Other debt: | |||||||||||||||||
23 | 57 | 4,745 | – New borrowings | 189 | 20,986 | ||||||||||||
(4,077) | (3,901) | (2,688) | – Repayments | (13,684) | (12,523) | ||||||||||||
(788) | (1,162) | (831) | Interest paid | (2,756) | (2,952) | ||||||||||||
(268) | (57) | 419 | Derivative financial instruments | (774) | 662 | ||||||||||||
4 | — | — | Change in non-controlling interest | 19 | (40) | ||||||||||||
Cash dividends paid to: | |||||||||||||||||
(1,812) | (1,310) | (1,236) | – Royal Dutch Shell plc shareholders2 | (4,414) | (6,117) | ||||||||||||
(40) | (140) | (65) | – Non-controlling interest | (305) | (242) | ||||||||||||
(971) | — | — | Repurchases of shares | (1,187) | (1,702) | ||||||||||||
34 | (2) | 1 | Shares held in trust: net sales/(purchases) and dividends received | (32) | (198) | ||||||||||||
(7,930) | (6,550) | 169 | Cash flow from financing activities | (22,900) | (1,892) | ||||||||||||
(322) | (2) | 36 | Effects of exchange rate changes on cash and cash equivalents | (453) | (395) | ||||||||||||
3,969 | 3,119 | 7,775 | Increase/(decrease) in cash and cash equivalents | 6,244 | 17,659 | ||||||||||||
34,104 | 30,985 | 27,939 | Cash and cash equivalents at beginning of period | 31,830 | 18,055 | ||||||||||||
38,073 | 34,104 | 35,714 | Cash and cash.... |