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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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| 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.
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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 ProductsIn
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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
PERFORMANCE BY SEGMENT
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| 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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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|
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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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| 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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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CHEMICALS |
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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) |
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|
|
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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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CORPORATE |
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|
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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
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| CONSOLIDATED
STATEMENT OF INCOME |
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|
|
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 |
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|
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”.
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| |
| 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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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| 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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
4. For Q3 2021, assets held for sale are presented separately.
Prior period comparatives have been revised to conform with current
year presentation.
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|
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|
|
|
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|
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|
| |
| 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
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
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|
|
|
|
|
|
|
|
|
|
|
| |
| 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 equivalents at end of period |
38,073 |
|
35,714 |
|
1. As from 2021 renamed from 'Proceeds from sale of joint
ventures and associates'. 2. Cash dividends paid represents
the payment of net dividends (after deduction of withholding taxes
where applicable) and payment of withholding taxes on dividends
paid in the previous quarter.
Page 13
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS 1. Basis of preparation These
unaudited Condensed Consolidated Interim Financial Statements
("Interim Statements") of Royal Dutch Shell plc (“the Company”) and
its subsidiaries (collectively referred to as “Shell”) have been
prepared in accordance with IAS 34 Interim Financial Reporting as
issued by the International Accounting Standards Board ("IASB") and
as adopted by the UK. For periods beginning on or after January 1,
2021, Shell's (interim) financial statements are prepared in
accordance with UK-adopted international accounting standards which
were established as a result of the UK's exit from the European
Union. As applied to Shell there are no material differences from
International Financial Reporting Standards as issued by the IASB.
Except for the application of UK-adopted international accounting
standards these Interim Statements have been prepared on the basis
of the same accounting principles as those used in the Annual
Report and Accounts (pages 216 to 264) and Form 20-F (pages 164 to
211) for the year ended December 31, 2020 as filed with the
Registrar of Companies for England and Wales and the US Securities
and Exchange Commission, respectively, and should be read in
conjunction with these filings.The financial information presented
in the unaudited Interim Statements does not constitute statutory
accounts within the meaning of section 434(3) of the Companies Act
2006 (“the Act”). Statutory accounts for the year ended
December 31, 2020 were published in Shell’s Annual Report and
Accounts, a copy of which was delivered to the Registrar of
Companies for England and Wales, and in Shell's Form 20-F. The
auditor’s report on those accounts was unqualified, did not include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying the report and did not contain a
statement under sections 498(2) or 498(3) of the Act.Key accounting
considerations, significant judgements and estimates Future
commodity price assumptions and management's view on the future
development of refining margins represent a significant estimate
and both were subject to change in 2020, resulting in the
recognition of impairments in 2020. These assumptions continue to
apply for impairment testing purposes in the third quarter
2021. 2. Segment information Segment
earnings are presented on a current cost of supplies basis (CCS
earnings), which is the earnings measure used by the Chief
Executive Officer for the purposes of making decisions about
allocating resources and assessing performance. On this basis, the
purchase price of volumes sold during the period is based on the
current cost of supplies during the same period after making
allowance for the tax effect. CCS earnings therefore exclude the
effect of changes in the oil price on inventory carrying amounts.
Sales between segments are based on prices generally equivalent to
commercially available prices.
Page 14
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| INFORMATION BY
SEGMENT |
|
|
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
| |
|
|
Third-party revenue |
|
|
|
6,994 |
|
9,247 |
|
7,684 |
|
Integrated Gas |
27,499 |
|
25,277 |
|
|
2,368 |
|
2,242 |
|
1,670 |
|
Upstream |
6,551 |
|
5,191 |
|
|
46,281 |
|
44,570 |
|
31,823 |
|
Oil Products |
129,233 |
|
97,716 |
|
|
4,390 |
|
4,444 |
|
2,831 |
|
Chemicals |
12,904 |
|
8,335 |
|
|
11 |
|
12 |
|
13 |
|
Corporate |
36 |
|
35 |
|
|
60,044 |
|
60,515 |
|
44,021 |
|
Total
third-party revenue¹ |
176,224 |
|
136,554 |
|
| |
|
|
Inter-segment revenue |
|
|
|
1,887 |
|
1,794 |
|
864 |
|
Integrated Gas |
5,032 |
|
2,313 |
|
|
9,191 |
|
8,924 |
|
5,111 |
|
Upstream |
25,370 |
|
15,704 |
|
|
3,094 |
|
3,017 |
|
1,547 |
|
Oil Products |
8,567 |
|
4,480 |
|
|
1,663 |
|
1,633 |
|
715 |
|
Chemicals |
4,483 |
|
2,065 |
|
|
— |
|
— |
|
— |
|
Corporate |
— |
|
— |
|
| |
|
|
CCS
earnings |
|
|
|
(3,247) |
|
422 |
|
(151) |
|
Integrated Gas |
(297) |
|
(6,298) |
|
|
1,274 |
|
2,415 |
|
(1,110) |
|
Upstream |
4,786 |
|
(8,694) |
|
|
1,362 |
|
33 |
|
2,092 |
|
Oil Products |
2,044 |
|
1,281 |
|
|
357 |
|
462 |
|
131 |
|
Chemicals |
1,509 |
|
441 |
|
|
(623) |
|
(592) |
|
(739) |
|
Corporate |
(1,747) |
|
(1,998) |
|
|
(876) |
|
2,741 |
|
222 |
|
Total CCS earnings |
6,295 |
|
(15,268) |
|
1. Includes revenue from sources other
than from contracts with customers, which mainly comprises the
impact of fair value accounting of commodity derivatives. Third
quarter 2021 included losses of $5,032 million mainly driven
by Integrated Gas, refer to “Performance by Segment” (Q2 2021: $340
million losses; Q3 2020: $1,803 million income). This amount
includes both the reversal of prior losses of $1,205 million (Q2
2021: $374 million losses; Q3 2020: $15 million losses) related to
sales contracts and prior gains of $1,517 million (Q2 2021: $434
million gains; Q3 2020: $22 million gains) related to purchase
contracts that were previously recognised and where physical
settlement took place in the third quarter 2021.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| RECONCILIATION
OF INCOME FOR THE PERIOD TO CCS EARNINGS |
|
|
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
(447) |
|
3,428 |
|
489 |
|
Income/(loss) attributable to Royal Dutch Shell plc
shareholders |
8,640 |
|
(17,666) |
|
|
130 |
|
131 |
|
57 |
|
Income/(loss)
attributable to non-controlling interest |
385 |
|
88 |
|
|
(317) |
|
3,559 |
|
546 |
|
Income/(loss) for the period |
9,025 |
|
(17,578) |
|
| |
|
|
Current cost of
supplies adjustment: |
|
|
|
(666) |
|
(994) |
|
(395) |
|
Purchases |
(3,291) |
|
2,947 |
|
|
142 |
|
208 |
|
100 |
|
Taxation |
703 |
|
(719) |
|
|
(35) |
|
(33) |
|
(29) |
|
Share of
profit/(loss) of joint ventures and associates |
(143) |
|
82 |
|
|
(559) |
|
(818) |
|
(324) |
|
Current
cost of supplies adjustment |
(2,730) |
|
2,310 |
|
| |
|
|
of which: |
|
|
|
(541) |
|
(793) |
|
(312) |
|
Attributable to
Royal Dutch Shell plc shareholders |
(2,648) |
|
2,222 |
|
(18) |
|
(25) |
|
(12) |
Attributable to
non-controlling interest |
(82) |
|
88 |
|
(876) |
|
2,741 |
|
222 |
|
CCS
earnings |
6,295 |
|
(15,268) |
|
| |
|
|
of which: |
|
|
|
(988) |
|
2,634 |
|
177 |
|
CCS earnings
attributable to Royal Dutch Shell plc shareholders |
5,992 |
|
(15,443) |
|
|
112 |
|
106 |
|
45 |
|
CCS
earnings attributable to non-controlling interest |
303 |
|
176 |
|
Page 15
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
3. Earnings per share
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| EARNINGS PER
SHARE |
|
Quarters |
|
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
(447) |
|
3,428 |
|
489 |
|
Income/(loss) attributable to Royal Dutch Shell plc shareholders ($
million) |
8,640 |
|
(17,666) |
|
| |
|
|
|
|
|
| |
|
|
Weighted average
number of shares used as the basis for determining: |
|
|
|
7,773.3 |
|
7,790.1 |
|
7,788.7 |
|
Basic earnings per share (million) |
7,781.8 |
|
7,799.4 |
|
|
7,773.3 |
|
7,835.9 |
|
7,823.6 |
|
Diluted earnings per share (million) |
7,827.9 |
|
7,799.4 |
|
4. Share capital
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| ISSUED AND
FULLY PAID ORDINARY SHARES OF €0.07 EACH1 |
| |
Number of shares |
Nominal value ($ million) |
| |
A |
B |
A |
B |
Total |
| At
January 1, 2021 |
4,101,239,499 |
|
3,706,183,836 |
|
345 |
306 |
651 |
| Repurchases of
shares |
— |
|
(48,493,633) |
|
— |
(4) |
(4) |
| At
September 30, 2021 |
4,101,239,499 |
|
3,657,690,203 |
|
345 |
302 |
647 |
| At
January 1, 2020 |
4,151,787,517 |
|
3,729,407,107 |
|
349 |
308 |
657 |
| Repurchases of
shares |
(50,548,018) |
|
(23,223,271) |
|
(4) |
(2) |
(6) |
|
At September 30, 2020 |
4,101,239,499 |
|
3,706,183,836 |
|
345 |
306 |
651 |
1. Share capital at September 30, 2021
also included 50,000 issued and fully paid sterling deferred shares
of £1 each. At Royal Dutch Shell plc’s Annual General Meeting on
May 18, 2021, the Board was authorised to allot ordinary
shares in Royal Dutch Shell plc, and to grant rights to subscribe
for, or to convert, any security into ordinary shares in Royal
Dutch Shell plc, up to an aggregate nominal amount of €182.1
million (representing 2,602 million ordinary shares of €0.07 each),
and to list such shares or rights on any stock exchange. This
authority expires at the earlier of the close of business on
August 18, 2022, and the end of the Annual General Meeting to
be held in 2022, unless previously renewed, revoked or varied by
Royal Dutch Shell plc in a general meeting. 5. Other
reserves
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| OTHER
RESERVES |
|
$ million |
Merger reserve |
Share premium reserve |
Capital redemption reserve |
Share plan reserve |
Accumulated other comprehensive income |
Total |
| At
January 1, 2021 |
37,298 |
|
154 |
|
129 |
|
906 |
|
(25,735) |
|
12,752 |
|
| Other
comprehensive income/(loss) attributable to Royal Dutch Shell plc
shareholders |
— |
|
— |
|
— |
|
— |
|
5,544 |
|
5,544 |
|
| Transfer from
other comprehensive income |
— |
|
— |
|
— |
|
— |
|
(14) |
|
(14) |
|
| Repurchases of
shares |
— |
|
— |
|
4 |
|
— |
|
— |
|
4 |
|
| Share-based
compensation |
— |
|
— |
|
— |
|
(68) |
|
— |
|
(68) |
|
| At
September 30, 2021 |
37,298 |
|
154 |
|
133 |
|
838 |
|
(20,206) |
|
18,218 |
|
| At
January 1, 2020 |
37,298 |
|
154 |
|
123 |
|
1,049 |
|
(24,173) |
|
14,451 |
|
| Other
comprehensive income/(loss) attributable to Royal Dutch Shell plc
shareholders |
— |
|
— |
|
— |
|
— |
|
(5,102) |
|
(5,102) |
|
| Transfer from
other comprehensive income |
— |
|
— |
|
— |
|
— |
|
185 |
|
185 |
|
| Repurchases of
shares |
— |
|
— |
|
6 |
|
— |
|
— |
|
6 |
|
| Share-based
compensation |
— |
|
— |
|
— |
|
(237) |
|
— |
|
(237) |
|
|
At September 30, 2020 |
37,298 |
|
154 |
|
129 |
|
812 |
|
(29,091) |
|
9,303 |
|
Page 16
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
The merger reserve and share premium reserve were established as
a consequence of Royal Dutch Shell plc becoming the single parent
company of Royal Dutch Petroleum Company and The “Shell” Transport
and Trading Company, p.l.c., now The Shell Transport and Trading
Company Limited, in 2005. The merger reserve increased in 2016
following the issuance of shares for the acquisition of BG Group
plc. The capital redemption reserve was established in connection
with repurchases of shares of Royal Dutch Shell plc. The share plan
reserve is in respect of equity-settled share-based compensation
plans. 6. Derivative financial instruments and debt
excluding lease liabilities As disclosed in the Consolidated
Financial Statements for the year ended December 31, 2020,
presented in the Annual Report and Accounts and Form 20-F for that
year, Shell is exposed to the risks of changes in fair value of its
financial assets and liabilities. The fair values of the financial
assets and liabilities are defined as the price that would be
received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement
date. Methods and assumptions used to estimate the fair values at
September 30, 2021, are consistent with those used in the year
ended December 31, 2020, though the carrying amounts of
derivative financial instruments measured using predominantly
unobservable inputs have changed since that date. The table below
provides the comparison of the fair value with the carrying amount
of debt excluding lease liabilities, disclosed in accordance with
IFRS 7 Financial Instruments: Disclosures.
| |
|
|
|
|
|
|
|
|
| |
| DEBT EXCLUDING
LEASE LIABILITIES |
|
$ million |
September 30, 2021 |
December 31, 2020 |
| Carrying
amount |
67,422 |
|
79,594 |
|
| Fair
value¹ |
74,397 |
|
88,294 |
|
1. Mainly determined from the prices
quoted for these securities. 7. Other notes to the
unaudited Condensed Consolidated Interim Financial Statements
Consolidated Statement of IncomeInterest and other income
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
497 |
|
134 |
|
234 |
|
Interest and other income |
3,087 |
|
458 |
|
| |
|
|
of which: |
|
|
|
136 |
|
95 |
|
154 |
|
Interest
income |
366 |
|
511 |
|
|
9 |
|
34 |
|
3 |
|
Dividend income
(from investments in equity securities) |
44 |
|
19 |
|
|
298 |
|
(55) |
|
103 |
|
Net gains on sales
and revaluation of non-current assets and businesses |
2,316 |
|
124 |
|
|
(42) |
|
4 |
|
(150) |
|
Net foreign
exchange gains/(losses) on financing activities |
48 |
|
(355) |
|
|
96 |
|
56 |
|
123 |
|
Other |
313 |
|
159 |
|
Depreciation, depletion and amortisation
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
6,358 |
|
8,223 |
|
7,689 |
|
Depreciation, depletion and amortisation |
20,477 |
|
42,871 |
|
Depreciation, depletion and amortisation in Q3 2021 includes
$352 million pre-tax (Q2 2021: $2,333 million; Q3 2020: $1,615
million; nine months 2021: $2,770 million; nine months 2020:
$24,145) of impairments. Condensed Consolidated Balance
Sheet Assets classified as held for sale
Page 17
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
| |
|
|
|
|
|
|
|
|
| |
|
$ million |
|
|
| |
September 30, 2021 |
December 31, 2020 |
| Assets
classified as held for sale |
7,922 |
|
1,258 |
|
|
Liabilities directly associated with assets classified as held for
sale |
1,758 |
|
196 |
|
Assets classified as held for sale and associated
liabilities at September 30, 2021 mainly relate to the Permian
business in the USA and two refineries. The major classes of
assets and liabilities classified as held for sale are Property,
plant and equipment ($6,192 million; December 31, 2020: $1,146
million), Inventories ($787 million; December 31, 2020: zero),
Decommissioning and other provisions ($692 million; December 31,
2020: $196 million) and Debt ($531 million; December 31, 2020:
zero).Retirement benefits
| |
|
|
|
|
|
|
|
|
| |
|
$ million |
|
|
| |
September 30, 2021 |
December 31, 2020 |
|
Non-current assets |
|
|
|
Retirement benefits |
8,009 |
|
2,474 |
|
|
Non-current liabilities |
|
|
|
Retirement benefits¹ |
11,835 |
|
15,605 |
|
|
Deficit |
3,826 |
|
13,131 |
|
1.As from January 1, 2021 the 'Retirement benefits' liability
has been classified under non-current liabilities (previously
partly presented within current liabilities). Prior period
comparatives have been revised by $437 million to conform with
current year presentation.The decrease in the net retirement
benefit liability is mainly driven by an increase of the market
yield on high-quality corporate bonds in the USA, the UK and
Eurozone and positive returns on plan assets, partly offset by an
increase in expected inflation in the UK and Eurozone. Amounts
recognised in the balance sheet in relation to defined benefit
plans include both plan assets and obligations that are presented
on a net basis on a plan-by-plan basis. Income taxes
payable
| |
|
|
|
|
|
|
|
|
| |
|
$ million |
|
|
| |
September 30, 2021 |
December 31, 2020 |
|
Income taxes payable |
2,809 |
|
3,111 |
|
As from January 1, 2021 taxes payable not related to
income tax are presented within 'Trade and other payables'
(previously within 'Taxes payable') and 'Taxes payable' has been
renamed into 'Income taxes payable'. Prior period comparatives have
been revised by $2,895 million to conform with current year
presentation.
Page 18
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES A.Adjusted
Earnings and Adjusted earnings before interest, taxes, depreciation
and amortisation (EBITDA) The “Adjusted Earnings” measure aims
to facilitate a comparative understanding of Shell’s financial
performance from period to period by removing the effects of oil
price changes on inventory carrying amounts and removing the
effects of identified items. These items are in some cases driven
by external factors and may, either individually or collectively,
hinder the comparative understanding of Shell’s financial results
from period to period. This measure excludes earnings attributable
to non-controlling interest.The “Adjusted EBITDA (CCS basis)” and
“Adjusted EBITDA (FIFO basis)” measures are introduced with effect
from January 1, 2021. Management uses both measures to evaluate
Shell’s performance in the period and over time.We define "Adjusted
EBITDA (CCS basis)" as "Income/(loss) for the period" adjusted for
current cost of supplies; identified items; tax charge/(credit);
depreciation, amortisation and depletion; exploration well
write-offs and net interest expense. All items include the
non-controlling interest component.We define “Adjusted EBITDA (FIFO
basis)” as “Income/(loss) for the period adjusted for identified
items; tax charge/(credit); depreciation, amortisation and
depletion; exploration well write-offs and net interest expense.
All items include the non-controlling interest component.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| ADJUSTED
EARNINGS |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
(447) |
|
3,428 |
|
489 |
|
Income/(loss) attributable to Royal Dutch Shell plc
shareholders |
8,640 |
|
(17,666) |
|
|
(541) |
|
(793) |
|
(312) |
|
Add: Current cost
of supplies adjustment attributable to Royal Dutch Shell plc
shareholders (Note 2) |
(2,648) |
|
2,222 |
|
|
(5,118) |
|
(2,899) |
|
(778) |
|
Less: Identified
items attributable to Royal Dutch Shell plc shareholders |
(6,906) |
|
(19,897) |
|
|
4,130 |
|
5,534 |
|
955 |
|
Adjusted Earnings |
12,898 |
|
4,453 |
|
| |
|
|
Of
which: |
|
|
|
1,680 |
|
1,609 |
|
768 |
|
Integrated Gas |
4,705 |
|
3,274 |
|
|
1,686 |
|
2,469 |
|
(884) |
|
Upstream |
5,118 |
|
(2,104) |
|
|
1,212 |
|
1,299 |
|
1,680 |
|
Oil Products |
3,389 |
|
5,454 |
|
|
(3) |
|
112 |
|
55 |
|
Refining and Trading |
5 |
|
1,713 |
|
|
1,215 |
|
1,187 |
|
1,626 |
|
Marketing |
3,384 |
|
3,742 |
|
|
395 |
|
670 |
|
227 |
|
Chemicals |
1,795 |
|
581 |
|
|
(732) |
|
(399) |
|
(792) |
|
Corporate |
(1,797) |
|
(2,576) |
|
|
(112) |
|
(115) |
|
(45) |
|
Less: Non-controlling interest |
(312) |
|
(176) |
|
Page 19
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| ADJUSTED
EBITDA |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
4,130 |
|
5,534 |
|
955 |
|
Adjusted Earnings |
12,898 |
|
4,453 |
|
|
112 |
|
115 |
|
45 |
|
Add:
Non-controlling interest |
312 |
|
176 |
|
|
2,168 |
|
1,178 |
|
72 |
|
Add: Taxation
charge/(credit) excluding tax impact of identified items |
4,896 |
|
1,520 |
|
|
6,005 |
|
5,890 |
|
6,074 |
|
Add: Depreciation,
depletion and amortisation excluding impairments |
17,707 |
|
18,726 |
|
|
323 |
|
108 |
|
14 |
|
Add: Exploration
well write-offs |
567 |
|
615 |
|
|
859 |
|
893 |
|
992 |
|
Add: Interest
expense excluding identified items |
2,643 |
|
3,180 |
|
|
136 |
|
95 |
|
154 |
|
Less: Interest
income |
366 |
|
511 |
|
|
13,460 |
|
13,623 |
|
7,998 |
|
Adjusted EBITDA (CCS basis)1 |
38,656 |
|
28,159 |
|
| |
|
|
Of
which: |
|
|
|
3,768 |
|
3,364 |
|
2,349 |
|
Integrated Gas |
10,339 |
|
8,999 |
|
|
6,766 |
|
6,714 |
|
2,911 |
|
Upstream |
18,866 |
|
9,421 |
|
|
2,360 |
|
2,608 |
|
2,520 |
|
Oil Products |
7,080 |
|
9,134 |
|
|
415 |
|
676 |
|
228 |
|
Refining and Trading |
1,558 |
|
3,425 |
|
|
1,945 |
|
1,932 |
|
2,293 |
|
Marketing |
5,522 |
|
5,710 |
|
|
715 |
|
1,036 |
|
466 |
|
Chemicals |
2,792 |
|
1,439 |
|
|
(147) |
|
(101) |
|
(247) |
|
Corporate |
(421) |
|
(834) |
|
|
(559) |
|
(818) |
|
(324) |
|
Less: Current cost
of supplies adjustment (Note 2) |
(2,730) |
|
2,310 |
|
|
142 |
|
208 |
|
100 |
|
Add: Current cost
of supplies adjustment to taxation charge/(credit) (Note 2) |
703 |
|
(719) |
|
|
14,160 |
|
14,647 |
|
8,423 |
|
Adjusted EBITDA (FIFO basis)1 |
42,090 |
|
25,130 |
|
| |
|
|
Of
which: |
|
|
|
3,768 |
|
3,364 |
|
2,349 |
|
Integrated Gas |
10,339 |
|
8,999 |
|
|
6,766 |
|
6,714 |
|
2,911 |
|
Upstream |
18,866 |
|
9,421 |
|
|
2,965 |
|
3,553 |
|
2,863 |
|
Oil Products |
10,104 |
|
6,478 |
|
|
892 |
|
1,370 |
|
578 |
|
Refining and Trading |
3,977 |
|
1,017 |
|
|
2,073 |
|
2,182 |
|
2,286 |
|
Marketing |
6,126 |
|
5,463 |
|
|
810 |
|
1,117 |
|
548 |
|
Chemicals |
3,201 |
|
1,066 |
|
|
(147) |
|
(101) |
|
(247) |
|
Corporate |
(421) |
|
(834) |
|
1.With effect from Q3 2021, Adjusted EBITDA includes the
non-controlling interest component of Adjusted Earnings. Prior
period comparatives have been revised and had been previously
reported as Q2 2021 Adjusted EBITDA (CCS basis): $13,507 million
and Adjusted EBITDA (FIFO basis): $14,508
million.
Page 20
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
Identified itemsIdentified items comprise:
divestment gains and losses, impairments, redundancy and
restructuring, provisions for onerous contracts, fair value
accounting of commodity derivatives and certain gas contracts and
the impact of exchange rate movements on certain deferred tax
balances, and other items.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| IDENTIFIED
ITEMS |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
| |
|
|
Identified items before tax |
|
|
|
316 |
|
(55) |
|
103 |
|
Divestment gains/(losses) |
2,334 |
|
154 |
|
|
(352) |
|
(2,333) |
|
(1,636) |
|
Impairments |
(2,770) |
|
(24,718) |
|
|
321 |
|
68 |
|
25 |
|
Redundancy and restructuring |
(358) |
|
(511) |
|
|
(107) |
|
— |
|
(133) |
|
Provisions for onerous contracts |
(107) |
|
(133) |
|
|
(6,110) |
|
(1,373) |
|
721 |
|
Fair value accounting of commodity derivatives and certain gas
contracts |
(7,095) |
|
(195) |
|
|
15 |
|
(29) |
|
(134) |
|
Other |
17 |
|
(561) |
|
|
(5,917) |
|
(3,722) |
|
(1,055) |
|
Total
identified items before tax |
(7,978) |
|
(25,963) |
|
|
799 |
|
815 |
|
276 |
|
Total
tax impact of identified items |
1,064 |
|
6,066 |
|
| |
|
|
Identified items after tax |
|
|
|
301 |
|
(83) |
|
46 |
|
Divestment gains/(losses) |
1,629 |
|
24 |
|
|
(275) |
|
(1,787) |
|
(1,143) |
|
Impairments |
(2,155) |
|
(18,521) |
|
|
204 |
|
45 |
|
4 |
|
Redundancy and restructuring |
(237) |
|
(378) |
|
|
(82) |
|
— |
|
(126) |
|
Provisions for onerous contracts |
(82) |
|
(126) |
|
|
(5,164) |
|
(1,181) |
|
532 |
|
Fair value accounting of commodity derivatives and certain gas
contracts |
(5,980) |
|
(171) |
|
|
(121) |
|
121 |
|
13 |
|
Impact of exchange rate movements on tax balances |
(110) |
|
(397) |
|
|
19 |
|
(23) |
|
(104) |
|
Other |
21 |
|
(328) |
|
|
(5,118) |
|
(2,908) |
|
(778) |
|
Impact
on CCS earnings |
(6,914) |
|
(19,897) |
|
| |
|
|
Of which: |
|
|
|
(4,927) |
|
(1,187) |
|
(920) |
|
Integrated Gas |
(5,002) |
|
(9,572) |
|
|
(412) |
|
(53) |
|
(226) |
|
Upstream |
(332) |
|
(6,590) |
|
|
150 |
|
(1,267) |
|
411 |
|
Oil Products |
(1,344) |
|
(4,174) |
|
|
(38) |
|
(208) |
|
(96) |
|
Chemicals |
(286) |
|
(140) |
|
|
109 |
|
(193) |
|
52 |
|
Corporate |
50 |
|
578 |
|
|
(5,118) |
|
(2,899) |
|
(778) |
|
Impact on
CCS earnings attributable to shareholders |
(6,906) |
|
(19,897) |
|
|
— |
|
(8) |
|
— |
|
Impact on CCS earnings attributable to non-controlling
interest |
(8) |
|
— |
|
The identified items categories above may include
after-tax impacts of identified items of joint ventures and
associates which are fully reported within "Share of profit of
joint ventures and associates" in the Consolidated Statement of
Income, and fully reported as identified items before tax in the
table above. Identified items related to subsidiaries are
consolidated and reported across appropriate lines of the
Consolidated Statement of Income. Only pre-tax identified items
reported by subsidiaries are taken into account in the calculation
of underlying operating expenses (Reference F). Provisions
for onerous contracts: Provisions for onerous contracts that relate
to businesses that Shell has exited or to redundant assets or
assets that cannot be used.Fair value accounting of commodity
derivatives and certain gas contracts: In the ordinary course of
business, Shell enters into contracts to supply or purchase oil and
gas products, as well as power and environmental products. Shell
also enters into contracts for tolling, pipeline and storage
capacity. Derivative contracts are entered into for mitigation of
resulting economic exposures (generally price exposure) and these
derivative contracts are carried at period-end market price (fair
value), with movements in fair value recognised in income for the
period. Supply and purchase contracts entered into for operational
purposes, as well as contracts for tolling, pipeline and storage
capacity, are, by contrast, recognised when the transaction occurs;
furthermore, inventory is carried at historical cost or net
realisable value, whichever is lower.
Page 21
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
As a consequence, accounting mismatches occur because: (a) the
supply or purchase transaction is recognised in a different period,
or (b) the inventory is measured on a different basis. In addition,
certain contracts are, due to pricing or delivery conditions,
deemed to contain embedded derivatives or written options and are
also required to be carried at fair value even though they are
entered into for operational purposes. The accounting impacts are
reported as identified items. Impacts of exchange rate movements
on tax balances represent the impact on tax balances of
exchange rate movements arising on (a) the conversion to dollars of
the local currency tax base of non-monetary assets and liabilities,
as well as losses (this primarily impacts the Upstream and
Integrated Gas segments) and (b) the conversion of
dollar-denominated inter-segment loans to local currency, leading
to taxable exchange rate gains or losses (this primarily impacts
the Corporate segment). Other identified items represent
other credits or charges that based on Shell management's
assessment hinder the comparative understanding of Shell's
financial results from period to period.
B. Adjusted Earnings per share Adjusted
Earnings per share is calculated as Adjusted Earnings (see
Reference A), divided by the weighted average number of shares used
as the basis for basic earnings per share (see Note 3).
C. Cash capital expenditure Cash capital
expenditure represents cash spent on maintaining and developing
assets as well as on investments in the period. Management
regularly monitors this measure as a key lever to delivering
sustainable cash flows. Cash capital expenditure is the sum of the
following lines from the Consolidated Statement of Cash flows:
Capital expenditure, Investments in joint ventures and associates
and Investments in equity securities.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
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 |
|
|
4,840 |
|
4,383 |
|
3,737 |
|
Cash
capital expenditure |
13,197 |
|
12,324 |
|
| |
|
|
Of which: |
|
|
|
1,272 |
|
880 |
|
1,020 |
|
Integrated Gas |
3,167 |
|
2,638 |
|
|
1,502 |
|
1,696 |
|
1,245 |
|
Upstream |
4,732 |
|
5,642 |
|
|
976 |
|
882 |
|
832 |
|
Oil Products |
2,527 |
|
2,019 |
|
|
1,053 |
|
895 |
|
595 |
|
Chemicals |
2,678 |
|
1,810 |
|
|
36 |
|
30 |
|
45 |
|
Corporate |
94 |
|
215 |
|
D. Return on average capital
employed Return on average capital employed ("ROACE")
measures the efficiency of Shell’s utilisation of the capital that
it employs. Shell uses two ROACE measures: ROACE on a Net income
basis and ROACE on an Adjusted Earnings plus Non-controlling
interest (NCI) basis, both adjusted for after-tax interest
expense.Both measures refer to Capital employed which consists of
total equity, current debt and non-current debt. ROACE on a Net
income basis In this calculation, the sum of income for
the current and previous three quarters, adjusted for after-tax
interest expense, is expressed as a percentage of the average
capital employed for the same period.
Page 22
| |
|
|
| |
|
ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ million |
Quarters |
| |
Q3 2021 |
Q2 2021 |
Q3 2020 |
| Income -
current and previous three quarters |
5,069 |
5,933 |
(16,489) |
| Interest expense
after tax - current and previous three quarters |
2,636 |
2,668 |
2,933 |
| Income
before interest expense - current and previous three
quarters |
7,705 |
8,601 |
(13,556) |
| Capital
employed – opening |
269,397 |
265,435 |
281,505 |
| Capital employed –
closing |
262,074 |
271,319 |
269,397 |
| Capital
employed – average |
265,735 |
268,377 |
275,451 |
|
ROACE on a Net income basis |
2.9% |
3.2% |
(4.9)% |
ROACE on an Adjusted Earnings plus Non-controlling
interest (NCI) basis In this calculation, the sum of
Adjusted Earnings (see Reference A) plus non-controlling interest
(NCI) excluding identified items for the current and previous three
quarters, adjusted for after-tax interest expense, is expressed as
a percentage of the average capital employed for the same period.
This measure was previously referred to as “ROACE on a CCS basis
excluding identified items” and was renamed to improve clarity with
effect from the second quarter 2021. There is no change to the
calculation outcome as result of this nomenclature update.
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ million |
Quarters |
| |
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
Adjusted Earnings - current and previous three quarters
(Reference A) |
13,290 |
10,115 |
7,384 |
| Add:
Income/(loss) attributable to NCI - current and previous three
quarters |
443 |
371 |
212 |
| Add:
Current cost of supplies adjustment attributable to NCI - current
and previous three quarters |
(96) |
(90) |
89 |
| Less:
Identified items attributable to NCI (Reference A) - current and
previous three quarters |
(18) |
(18) |
— |
|
Adjusted Earnings plus NCI excluding identified items - current
and previous three quarters |
13,656 |
10,414 |
7,685 |
| Add:
Interest expense after tax - current and previous three
quarters |
2,636 |
2,668 |
2,933 |
|
Adjusted Earnings plus NCI excluding identified items before
interest expense - current and previous three quarters |
16,292 |
13,081 |
10,618 |
| Capital
employed - average |
265,735 |
268,377 |
275,451 |
|
ROACE on an Adjusted Earnings plus NCI basis |
6.1% |
4.9% |
3.9% |
E. Gearing Gearing is a measure of
Shell’s capital structure and is defined as net debt as a
percentage of total capital. Net debt is defined as the sum of
current and non-current debt, less cash and cash equivalents,
adjusted for the fair value of derivative financial instruments
used to hedge foreign exchange and interest rate risks relating to
debt, and associated collateral balances. Management considers this
adjustment useful because it reduces the volatility of net debt
caused by fluctuations in foreign exchange and interest rates, and
eliminates the potential impact of related collateral payments or
receipts. Debt-related derivative financial instruments are a
subset of the derivative financial instrument assets and
liabilities presented on the balance sheet. Collateral balances are
reported under “Trade and other receivables” or “Trade and other
payables” as appropriate.
Page 23
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ million |
Quarters |
| |
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
| Current
debt |
10,686 |
13,042 |
17,811 |
| Non-current
debt |
84,705 |
87,034 |
91,245 |
| Total
debt |
95,390 |
100,076 |
109,056 |
|
Of which lease liabilities |
27,969 |
28,340 |
28,930 |
| Add:
Debt-related derivative financial instruments: net
liability/(asset) |
(231) |
(912) |
(564) |
| Add:
Collateral on debt-related derivatives: net liability/(asset) |
407 |
675 |
686 |
| Less: Cash
and cash equivalents |
(38,073) |
(34,104) |
(35,714) |
| Net
debt |
57,492 |
65,735 |
73,463 |
| Add: Total
equity |
166,683 |
171,243 |
160,341 |
| Total
capital |
224,175 |
236,978 |
233,804 |
|
Gearing |
25.6 |
% |
27.7 |
% |
31.4 |
% |
F. Operating expenses Operating expenses
is a measure of Shell’s cost management performance, comprising the
following items from the Consolidated Statement of Income:
production and manufacturing expenses; selling, distribution and
administrative expenses; and research and development expenses.
Underlying operating expenses is a measure aimed at facilitating a
comparative understanding of performance from period to period by
removing the effects of identified items, which, either
individually or collectively, can cause volatility, in some cases
driven by external factors.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
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 |
|
|
8,359 |
|
8,470 |
|
8,095 |
|
Operating expenses |
26,264 |
|
25,137 |
|
| |
|
|
Of which
identified items: |
|
|
|
322 |
|
68 |
|
25 |
|
Redundancy and restructuring (charges)/reversal |
(357) |
|
(501) |
|
|
15 |
|
(31) |
|
(267) |
|
(Provisions)/reversal |
(16) |
|
(678) |
|
|
— |
|
(2) |
|
— |
|
Other |
33 |
|
— |
|
|
337 |
|
35 |
|
(242) |
|
|
(340) |
|
(1,179) |
|
|
8,696 |
|
8,505 |
|
7,854 |
|
Underlying operating expenses |
25,924 |
|
23,958 |
|
G. Free cash flow Free cash flow is used
to evaluate cash available for financing activities, including
dividend payments and debt servicing, after investment in
maintaining and growing the business. It is defined as the sum of
“Cash flow from operating activities” and “Cash flow from investing
activities”. Cash flows from acquisition and divestment activities
are removed from Free cash flow to arrive at the Organic free cash
flow, a measure used by management to evaluate the generation of
free cash flow without these activities.
Page 24
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
16,025 |
|
12,617 |
|
10,403 |
|
Cash flow
from operating activities |
36,935 |
|
27,818 |
|
|
(3,804) |
|
(2,946) |
|
(2,833) |
|
Cash flow from
investing activities |
(7,339) |
|
(7,871) |
|
|
12,221 |
|
9,671 |
|
7,571 |
|
Free
cash flow |
29,596 |
|
19,947 |
|
|
1,297 |
|
1,274 |
|
869 |
|
Less:
Divestment proceeds (Reference I) |
5,983 |
|
3,798 |
|
|
— |
|
24 |
|
— |
|
Add: Tax
paid on divestments (reported under "Other investing cash
outflows") |
24 |
|
— |
|
|
181 |
|
2 |
|
12 |
|
Add: Cash
outflows related to inorganic capital expenditure1 |
272 |
|
614 |
|
|
11,105 |
|
8,424 |
|
6,713 |
|
Organic free cash flow2 |
23,910 |
|
16,763 |
|
1.Cash outflows related to inorganic capital expenditure
includes portfolio actions which expand Shell's activities through
acquisitions and restructuring activities as reported in capital
expenditure lines in the Consolidated Statement of Cash Flows.
2.Free cash flow less divestment proceeds, adding back outflows
related to inorganic expenditure. H. Cash
flow from operating activities excluding working capital movements
Working capital movements are defined as the sum of the following
items in the Consolidated Statement of Cash
Flows: (i) (increase)/decrease in
inventories, (ii) (increase)/decrease in current receivables, and
(iii) increase/(decrease) in current payables. Cash flow from
operating activities excluding working capital movements is a
measure used by Shell to analyse its operating cash generation over
time excluding the timing effects of changes in inventories and
operating receivables and payables from period to period.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
16,025 |
|
12,617 |
|
10,403 |
|
Cash
flow from operating activities |
36,935 |
|
27,818 |
|
|
(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) |
|
|
(1,447) |
|
(1,559) |
|
1,448 |
|
(Increase)/decrease in working capital |
(7,396) |
|
4,947 |
|
|
17,472 |
|
14,176 |
|
8,955 |
|
Cash
flow from operating activities excluding working capital
movements |
44,331 |
|
22,871 |
|
| |
|
|
Of
which: |
|
|
|
7,871 |
|
4,350 |
|
2,396 |
|
Integrated Gas |
15,874 |
|
8,619 |
|
|
5,889 |
|
5,444 |
|
2,629 |
|
Upstream |
16,035 |
|
6,894 |
|
|
3,262 |
|
3,365 |
|
3,476 |
|
Oil Products |
9,939 |
|
6,259 |
|
|
684 |
|
1,225 |
|
488 |
|
Chemicals |
2,953 |
|
981 |
|
|
(233) |
|
(208) |
|
(33) |
|
Corporate |
(471) |
|
118 |
|
I. Divestment proceedsDivestment proceeds
represent cash received from divestment activities in the period.
Management regularly monitors this measure as a key lever to
deliver sustainable cash flow.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters |
$ million |
Nine months |
|
Q3 2021 |
Q2 2021 |
Q3 2020 |
|
2021 |
2020 |
|
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 |
|
1,297 |
|
1,274 |
869 |
Divestment proceeds |
5,983 |
3,798 |
1.As from 2021 renamed from 'Proceeds from sale of joint
ventures and associates'.
Page 25
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ROYAL DUTCH SHELL PLC3RD QUARTER 2021 UNAUDITED RESULTS |
CAUTIONARY STATEMENT All amounts shown throughout this
announcement are unaudited. All peak production figures in
Portfolio Developments are quoted at 100% expected production. The
numbers presented throughout this announcement may not sum
precisely to the totals provided and percentages may not precisely
reflect the absolute figures, due to rounding.The companies in
which Royal Dutch Shell plc directly and indirectly owns
investments are separate legal entities. In this announcement
“Shell”, “Shell Group” and “Group” are sometimes used for
convenience where references are made to Royal Dutch Shell plc and
its subsidiaries in general. Likewise, the words “we”, “us” and
“our” are also used to refer to Royal Dutch Shell plc and its
subsidiaries in general or to those who work for them. These terms
are also used where no useful purpose is served by identifying the
particular entity or entities. “Subsidiaries”, “Shell subsidiaries”
and “Shell companies” as used in this announcement refer to
entities over which Royal Dutch Shell plc either directly or
indirectly has control. Entities and unincorporated arrangements
over which Shell has joint control are generally referred to as
“joint ventures” and “joint operations”, respectively. Entities
over which Shell has significant influence but neither control nor
joint control are referred to as “associates”. The term “Shell
interest” is used for convenience to indicate the direct and/or
indirect ownership interest held by Shell in an entity or
unincorporated joint arrangement, after exclusion of all
third-party interest. This announcement contains forward-looking
statements (within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995) concerning the financial condition,
results of operations and businesses of Shell. All statements other
than statements of historical fact are, or may be deemed to be,
forward-looking statements. Forward-looking statements are
statements of future expectations that are based on management’s
current expectations and assumptions and involve known and unknown
risks and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or
implied in these statements. Forward-looking statements include,
among other things, statements concerning the potential exposure of
Shell to market risks and statements expressing management’s
expectations, beliefs, estimates, forecasts, projections and
assumptions. These forward-looking statements are identified by
their use of terms and phrases such as “aim”, “ambition”,
“anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”,
“intend”, “may”, “milestones”, “objectives”, “outlook”, “plan”,
“probably”, “project”, “risks”, “schedule”, “seek”, “should”,
“target”, “will” and similar terms and phrases. There are a number
of factors that could affect the future operations of Shell and
could cause those results to differ materially from those expressed
in the forward-looking statements included in this announcement,
including (without limitation): (a) price fluctuations in crude oil
and natural gas; (b) changes in demand for Shell’s products; (c)
currency fluctuations; (d) drilling and production results; (e)
reserves estimates; (f) loss of market share and industry
competition; (g) environmental and physical risks; (h) risks
associated with the identification of suitable potential
acquisition properties and targets, and successful negotiation and
completion of such transactions; (i) the risk of doing business in
developing countries and countries subject to international
sanctions; (j) legislative, judicial, fiscal and regulatory
developments including regulatory measures addressing climate
change; (k) economic and financial market conditions in various
countries and regions; (l) political risks, including the risks of
expropriation and renegotiation of the terms of contracts with
governmental entities, delays or advancements in the approval of
projects and delays in the reimbursement for shared costs; (m)
risks associated with the impact of pandemics, such as the COVID-19
(coronavirus) outbreak; and (n) changes in trading conditions. No
assurance is provided that future dividend payments will match or
exceed previous dividend payments. All forward-looking statements
contained in this announcement are expressly qualified in their
entirety by the cautionary statements contained or referred to in
this section. Readers should not place undue reliance on
forward-looking statements. Additional risk factors that may affect
future results are contained in Royal Dutch Shell plc's Form 20-F
for the year ended December 31, 2020 (available at
www.shell.com/investor and www.sec.gov). These risk factors also
expressly qualify all forward-looking statements contained in this
announcement and should be considered by the reader. Each
forward-looking statement speaks only as of the date of this
announcement, October 28, 2021. Neither Royal Dutch Shell plc nor
any of its subsidiaries undertake any obligation to publicly update
or revise any forward-looking statement as a result of new
information, future events or other information. In light of these
risks, results could differ materially from those stated, implied
or inferred from the forward-looking statements contained in this
announcement. The content of websites referred to in this
announcement does not form part of this announcement. We may have
used certain terms, such as resources, in this announcement that
the United States Securities and Exchange Commission (SEC) strictly
prohibits us from including in our filings with the SEC. Investors
are urged to consider closely the disclosure in our Form 20-F, File
No 1-32575, available on the SEC website www.sec.gov. This
announcement contains inside information. October 28, 2021
| |
|
|
|
The information in this announcement reflects the unaudited
consolidated financial position and results of Royal Dutch Shell
plc. Company No. 4366849, Registered Office: Shell Centre, London,
SE1 7NA, England, UK. |
Contacts: - Linda M. Coulter, Company Secretary -
Media: International +44 (0) 207 934 5550; USA +1 832 337 4355
LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70
Classification: Inside Information
Page 26
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