TIDMSHELL
The following is an update to the third quarter 2023 outlook and
gives an overview of our current expectations for the third
quarter. Outlooks presented may vary from the actual third quarter
2023 results and are subject to finalisation of those results,
which are scheduled to be published on November 2, 2023. Unless
otherwise indicated, all outlook statements exclude identified
items. See appendix for previous quarter historical data.
Integrated Gas
$ billions Q3'23 Outlook Comment
-------------------- ------------- -------------------------------
Adjusted EBITDA:
Production (kboe/d) 880 - 920 Production and LNG liquefaction
outlook reflects scheduled
maintenance (including Prelude
and Trinidad and Tobago).
-------------------- ------------- -------------------------------
LNG liquefaction 6.6 - 7.0
volumes (MT)
------------- -------------------------------
Underlying opex 1.1 - 1.3
------------- -------------------------------
Adjusted Earnings:
Pre-tax depreciation 1.2 - 1.6
-------------------- ------------- -------------------------------
Taxation charge 0.7 - 1.0
------------- -------------------------------
Other Considerations:
Trading & Optimisation: expected to be higher compared
to Q2'23.
--------------------------------------------------------------------
Upstream
$ billions Q3'23 Outlook Comment
-------------------------------- -------------------- ----------
Adjusted EBITDA:
Production (kboe/d) 1,700 - 1,800
-------------------------------- -------------------- ----------
Underlying opex 2.1 - 2.6
-------------------- ----------
Adjusted Earnings:
Pre-tax depreciation 2.7 - 3.1
-------------------------------- -------------------- ----------
Taxation charge 2.1 - 2.9
-------------------- ----------
Other Considerations:
The share of profit / (loss) of joint ventures and associates
in Q3'23 is expected to be around zero. Q3'23 exploration
well-write offs are expected to be $0.2 billion.
------------------------------------------------------------------
Marketing
$ billions Q3'23 Outlook Comment
--------------------------- ----------------- --------
Adjusted EBITDA:
Sales volumes (kb/d) 2,450 - 2,850
--------------------------- ----------------- --------
Underlying opex 2.1 - 2.5
----------------- --------
Adjusted Earnings:
Pre-tax depreciation 0.3 - 0.7
--------------------------- ----------------- --------
Taxation charge 0.2 - 0.4
----------------- --------
Other Considerations:
Marketing results: expected to be similar to Q3'22.
--------------------------------------------------------
Chemicals & Products
$ billions Q3'23 Outlook Comment
---------------------- ------------- ----------------------------------
Adjusted EBITDA:
Indicative refining
margin $16/bbl
---------------------- ------------- ----------------------------------
The chemicals sub-segment adjusted
Indicative chemicals earnings are expected to be
margin $116/tonne in line with Q2'23.
------------- ----------------------------------
Refinery utilisation 82% - 86%
------------- ----------------------------------
Chemicals utilisation 68% - 72%
------------- ----------------------------------
Underlying opex 2.8 - 3.2
------------- ----------------------------------
Adjusted Earnings:
Pre-tax depreciation 0.8 - 1.0
---------------------- ------------- ----------------------------------
Taxation charge 0.0 - 0.5
------------- ----------------------------------
Other Considerations:
Trading & Optimisation: expected to be higher than Q2'23.
-------------------------------------------------------------------------
Renewables and Energy Solutions
$ billions Q3'23 Outlook Comment
----------------- ------------- -------
Adjusted Earnings (0.3) - 0.3
------------- -------
Corporate
$ billions Q3'23 Outlook Comment
----------------- ------------- -------
Adjusted Earnings (0.6) - (0.4)
------------- -------
Shell Group
$ billions Q3'23 Outlook Comment
--------------- ------------- ------------------------------
CFFO:
Tax Paid 2.7 - 3.5
--------------- ------------- ------------------------------
Working Capital (4) - 0 Working capital estimations
inherently have a broad range
of uncertainty.
------------- ------------------------------
Other Shell Group Considerations:
--------------------------------------------------------------
-
--------------------------------------------------------------
Guidance
The 'Quarterly Databook' contains guidance on Indicative
Refining Margin, Indicative Chemicals Margin and full-year price
and margin sensitivities (Link
https://www.globenewswire.com/Tracker?data=iw9ia2u5100h-DUmyM0BgWo8DvweR2IwbMYB-TrqbQVSA2VXGPZrcZIZg3RKH-G99lAv3wG4Ih_R7Qf_vmg_EidZDB0ukQHlHdjMW3aNnG2p_IVyPhuCgRzLzy49si3OBZXYsdFu7ENcqFUAIW18pin_1BPvvmT5-ghL1muGLnqxGFaiEm-gl5I3aVTOnGclnQsryGL8Av4G0hex5AirSwt3gk1ZyLxQhbKWLF98MH8UakVkrqiAa7fBwMH46Z4WtDTAYNTbYCs-R7D9421bTnMbQCuL86a4mfuxXLMW4-M-3_grztwMTqZK3ZGsiwMN
).
Consensus
The consensus collection for quarterly Adjusted Earnings,
Adjusted EBITDA is per the reporting segments and CFFO at a Shell
group level, managed by Vara Research, is expected to be published
on October 26, 2023.
Enquiries
Media International: +44 (0) 207 934 5550
Media Americas: +1 832 337 4355
Cautionary Note
The companies in which 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 Shell plc and its
subsidiaries in general. Likewise, the words "we", "us" and "our"
are also used to refer to 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 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. "Joint ventures" and "joint operations"
are collectively referred to as "joint arrangements". 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.
The numbers presented in this announcement may not sum precisely
to the totals provided and percentages may not precisely reflect
the absolute figures due to rounding.
Forward-Looking Statements
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 Shell plc's Form 20-F for the year ended December
31, 2022 (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 6, 2023. Neither 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.
Shell's net carbon intensity
Also, in this announcement we may refer to Shell's "Net Carbon
Intensity", which includes Shell's carbon emissions from the
production of our energy products, our suppliers' carbon emissions
in supplying energy for that production and our customers' carbon
emissions associated with their use of the energy products we sell.
Shell only controls its own emissions. The use of the term Shell's
"Net Carbon Intensity" is for convenience only and not intended to
suggest these emissions are those of Shell plc or its
subsidiaries.
Shell's net-Zero Emissions Target
Shell's operating plan, outlook and budgets are forecasted for a
ten-year period and are updated every year. They reflect the
current economic environment and what we can reasonably expect to
see over the next ten years. Accordingly, they reflect our Scope 1,
Scope 2 and Net Carbon Intensity (NCI) targets over the next ten
years. However, Shell's operating plans cannot reflect our 2050
net-zero emissions target and 2035 NCI target, as these targets are
currently outside our planning period. In the future, as society
moves towards net-zero emissions, we expect Shell's operating plans
to reflect this movement. However, if society is not net zero in
2050, as of today, there would be significant risk that Shell may
not meet this target.
Forward Looking Non-GAAP measures
This announcement may contain certain forward-looking non-GAAP
measures such as IFRS, including Adjusted Earnings, "Adjusted
EBITDA", Cash flow from operating activities excluding working
capital movements, Cash capital expenditure, Net debt and
Underlying opex.
Adjusted Earnings and Adjusted EBITDA are measures used to
evaluate Shell's performance in the period and over time.
The "Adjusted Earnings" and Adjusted EBITDA are measures which
aim 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.
Adjusted Earnings is defined as income/(loss) attributable to
shareholders adjusted for the current cost of supplies and
excluding identified items. "Adjusted EBITDA (CCS basis)" is
defined 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.
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. 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 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. 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. Underlying operating
expenses is a measure of Shell's cost management performance and
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. Underlying operating
expenses comprises the following items from the Consolidated
statement of Income: production and manufacturing expenses;
selling, distribution and administrative expenses; and research and
development expenses and removes the effects of identified items
such as redundancy and restructuring charges or reversals,
provisions or reversals and others.
We are unable to provide a reconciliation of these
forward-looking Non-GAAP measures to the most comparable GAAP
financial measures because certain information needed to reconcile
those Non-GAAP measures to the most comparable GAAP financial
measures is dependent on future events some of which are outside
the control of Shell, such as oil and gas prices, interest rates
and exchange rates. Moreover, estimating such GAAP measures with
the required precision necessary to provide a meaningful
reconciliation is extremely difficult and could not be accomplished
without unreasonable effort. Non-GAAP measures in respect of future
periods which cannot be reconciled to the most comparable GAAP
financial measure are calculated in a manner which is consistent
with the accounting policies applied in Shell plc's consolidated
financial statements.
The contents of websites referred to in this announcement do 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.
LEI number of Shell plc: 21380068P1DRHMJ8KU70
Appendix
Indicative Margins
Q2'23 Q3'23 Updated
Outlook
--------------------------- ---------- -------------
Indicative refining margin $9/bbl $16/bbl
---------- -------------
Indicative chemicals margin $153/tonne $116/tonne
---------- -------------
Underlying Opex
Q3'23 Updated
$ billions Q2'23 Q2'23 Adjusted Outlook
----------------------------------- ----- -------------- -------------
Production and manufacturing
expenses 6.0
----- -------------
Selling, distribution and
administrative expenses 3.3
----- -------------
Research and development 0.3
----- -------------
Operating Expenses (Opex) 9.7 9.7
----- -------------- -------------
Less: Identified Items 0.0
-------------- -------------
Underlying Opex 9.6
-------------- -------------
of which:
-------------
Integrated Gas 1.2 1.2 1.1 - 1.3
----- -------------- -------------
Upstream 2.3 2.3 2.1 - 2.6
----- -------------- -------------
Marketing 2.3 2.3 2.1 - 2.5
----- -------------- -------------
Chemicals & Products 2.9 2.9 2.8 - 3.2
----- -------------- -------------
Renewables and Energy Solutions 0.9 0.9
----- -------------- -------------
Depreciation, depletion and amortisation
Q3'23 Updated
$ billions Q2'23 Q2'23 Adjusted Outlook
----------------------------------- ----- -------------- -------------
Depreciation, Depletion &
Amortisation 7.9 7.9
----- -------------- -------------
Less: Identified Items 2.2
-------------- -------------
Pre-tax depreciation (as Adjusted) 5.7
-------------- -------------
of which:
-------------
Integrated Gas 3.3 1.4 1.2 - 1.6
----- -------------- -------------
Upstream 2.9 2.8 2.7 - 3.1
----- -------------- -------------
Marketing 0.5 0.5 0.3 - 0.7
----- -------------- -------------
Chemicals & Products 1.0 0.9 0.8 - 1.0
----- -------------- -------------
Renewables and Energy Solutions 0.2 0.1
----- -------------- -------------
Tax Charge
Q3'23 Updated
$ billions Q2'23 Q2'23 Adjusted Outlook
----------------------------------- ----- -------------- -------------
Taxation Charge 2.2 2.2
----- -------------- -------------
Less: Identified Items (0.5)
-------------- -------------
Taxation Charge (as Adjusted) 2.8
-------------- -------------
of which:
-------------
Integrated Gas 0.3 0.8 0.7 - 1.0
----- -------------- -------------
Upstream 1.6 1.7 2.1 - 2.9
----- -------------- -------------
Marketing 0.3 0.2 0.2 - 0.4
----- -------------- -------------
Chemicals & Products (0.1) (0.0) 0.0 - 0.5
----- -------------- -------------
Renewables and Energy Solutions 0.2 0.1
----- -------------- -------------
Adjusted Earnings
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. For further details see the 2nd Quarter 2023 and half
year unaudited results (Link
https://www.globenewswire.com/Tracker?data=iw9ia2u5100h-DUmyM0BgcdrttVb79AHqH5rz2odIAnukDRIbIpGd7CPnkwKnMykyc7v2vC7ARJXsM1Nul_g6yCAtD3QLl0KnnRCG3rCqbhzT4ckLg8VzVDg3CrOmeHW17TJeMAGRcQDJ441f4-f0GaUv1b6ypboJe8Y75UTQ-jVPJD4jjIKkarAoQC1Jsy2mTc_3r0UF7-Ecd-onzWUGxgPaKCCmQFLZa74b5o2tP2y64SFH2pdig6cJGUs0XySwNch176eu33KRjApSOwPYoPjQrCTXAsENcxL8TOdn12LENWv5_PodII7xVDEIdaIva0XNChUdS4IzqJSrFTf3NBtr0b1a86ss6vhCFuyW6kHsKDvTXvrnVQmFgvLopLeCuUXpsNmlrKyRCBJjVJJVkk0qOcxZShZmGxdmYrinD29tG8N5YmM3rqf0t9fYiFLB4nHxWauW0f8VPwdEx1FpA==
).
Q3'23 Updated
$ billions Q2'23 Q2'23 Adjusted Outlook
------------------------------------ ----- -------------- -------------
Income/(loss) attributable
to Shell plc shareholders 3.1 3.1
----- -------------- -------------
Add: Current cost of supplies
adjustment attributable to
Shell plc shareholders 0.3
-------------- -------------
Less: Identified items attributable
to Shell plc shareholders (1.6)
-------------- -------------
Adjusted Earnings 5.1
-------------- -------------
of which:
-------------
Renewables and Energy Solutions 0.5 0.2 (0.3) - 0.3
----- -------------- -------------
Corporate (0.7) (0.7) (0.6) - (0.4)
----- -------------- -------------
Volume Data
Q3'23 Updated
Q2'23 Outlook
------------------------------ ----- -------------
Integrated Gas
-------------
Production (kboe/d) 985 880 - 920
----- -------------
LNG liquefaction volumes (MT) 7.2 6.6 - 7.0
----- -------------
Upstream
-------------
Production (kboe/d) 1,701 1,700 - 1,800
----- -------------
Marketing
-------------
Sales volumes (kb/d) 2,607 2,450 - 2,850
----- -------------
Chemicals & Products
-------------
Refinery utilisation 85% 82% - 86%
----- -------------
Chemicals utilisation 70% 68% - 72%
----- -------------
(END) Dow Jones Newswires
October 06, 2023 02:00 ET (06:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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