ROYAL DUTCH SHELL PLC 3RD QUARTER 2019 UNAUDITED RESULTS
|
SUMMARY OF UNAUDITED
RESULTS |
Quarters |
$ million |
|
Nine months |
Q3 20191 |
Q2 20191 |
Q3 2018 |
%2 |
|
Reference |
20191 |
2018 |
% |
5,879 |
2,998 |
5,839 |
+1 |
Income/(loss) attributable to
shareholders |
|
14,878 |
17,762 |
-16 |
6,081 |
3,025 |
5,570 |
+9 |
CCS earnings attributable to
shareholders |
Note
2 |
14,399 |
16,499 |
-13 |
1,313 |
(437) |
(54) |
|
Of
which: Identified items |
A |
868 |
783 |
|
4,767 |
3,462 |
5,624 |
-15 |
CCS earnings attributable to
shareholders excluding identified items |
|
13,530 |
15,716 |
-14 |
149 |
130 |
169 |
|
Add:
CCS earnings attributable to non-controlling interest |
|
410 |
411 |
|
4,917 |
3,592 |
5,793 |
-15 |
CCS earnings excluding identified
items |
|
13,940 |
16,127 |
-14 |
|
|
|
|
Of which: |
|
|
|
|
2,674 |
1,726 |
2,292 |
|
Integrated Gas |
|
6,968 |
7,036 |
|
907 |
1,335 |
1,886 |
|
Upstream |
|
3,967 |
4,894 |
|
2,153 |
1,338 |
2,010 |
|
Downstream |
|
5,313 |
5,436 |
|
(817) |
(806) |
(395) |
|
Corporate |
|
(2,307) |
(1,239) |
|
12,252 |
11,031 |
12,092 |
+1 |
Cash flow from operating
activities |
|
31,913 |
31,064 |
+3 |
(2,130) |
(4,166) |
(4,082) |
|
Cash flow from investing
activities |
|
(10,918) |
(8,347) |
|
10,122 |
6,865 |
8,010 |
|
Free
cash flow |
H |
20,995 |
22,717 |
|
0.73 |
0.37 |
0.70 |
+4 |
Basic earnings per share ($) |
|
1.84 |
2.14 |
-14 |
0.76 |
0.37 |
0.67 |
+13 |
Basic CCS earnings per share ($) |
B |
1.78 |
1.99 |
-11 |
0.59 |
0.43 |
0.68 |
-13 |
Basic
CCS earnings per share excl. identified items ($) |
|
1.67 |
1.89 |
-12 |
0.47 |
0.47 |
0.47 |
- |
Dividend per share ($) |
|
1.41 |
1.41 |
- |
- IFRS 16 Leases (IFRS 16) was adopted with effect from January
1, 2019. See Note 8 “Adoption of IFRS 16 Leases”.
- Q3 on Q3 change.
|
Compared with the third quarter 2018, CCS earnings attributable
to shareholders excluding identified items were $4.8 billion,
reflecting lower realised oil, LNG and gas prices, as well as
weaker realised refining and chemicals margins. This was partly
offset by significantly stronger contributions from LNG and oil
products trading and optimisation as well as higher realised
margins in retail and global commercial.
Compared with the third quarter 2018, cash flow from operating
activities excluding working capital movements was $12.1 billion,
reflecting lower earnings, higher pension contributions and lower
dividends received.
Total dividends distributed to shareholders in the quarter were
$3.8 billion. Today, Shell launches the next tranche of the share
buyback programme, with a maximum aggregate consideration of $2.75
billion in the period up to and including January 27, 2020. Since
the launch of the programme, Shell has bought back $12 billion in
shares for cancellation.
Royal Dutch Shell Chief Executive Officer Ben van
Beurden commented: “This quarter we continued to deliver
strong cash flow and earnings, despite sustained lower oil and gas
prices, and chemicals margins. Our earnings reflect the resilience
of our market-facing businesses and their ability to capitalise on
market conditions, including very strong trading and optimisation
results this quarter.
Our intention to buy back $25 billion in shares and reduce net
debt remains unchanged. The prevailing weak macroeconomic
conditions and challenging outlook inevitably create uncertainty
about the pace of reducing gearing to 25% and completing the share
buyback programme within the 2020 timeframe.”
|
ADDITIONAL
PERFORMANCE MEASURES |
Quarters |
$ million |
|
Nine months |
Q3 2019 |
Q2 2019 |
Q3 2018 |
%1 |
|
Reference |
2019 |
2018 |
% |
6,098 |
5,337 |
5,902 |
|
Cash capital
expenditure2 |
C |
17,036 |
16,648 |
|
7,759 |
6,341 |
5,717 |
|
Capital
investment3 |
C |
20,785 |
16,999 |
|
3,563 |
3,583 |
3,596 |
-1 |
Total production available for sale (thousand boe/d) |
|
3,632 |
3,625 |
- |
55.99 |
61.26 |
68.21 |
-18 |
Global liquids realised
price ($/b) |
|
58.18 |
65.13 |
-11 |
4.19 |
4.21 |
4.92 |
-15 |
Global natural
gas realised price ($/thousand scf) |
|
4.63 |
4.91 |
-6 |
8,650 |
9,941 |
9,312 |
-7 |
Operating expenses |
G |
27,509 |
29,037 |
-5 |
8,657 |
9,477 |
9,248 |
-6 |
Underlying
operating expenses |
G |
27,000 |
28,878 |
-7 |
8.6% |
8.4% |
8.7% |
|
ROACE (Net income
basis) |
E |
8.6% |
8.7% |
|
8.1% |
8.2% |
8.1% |
|
ROACE (CCS basis
excluding identified items)4 |
E |
8.1% |
8.1% |
|
27.9% |
27.6% |
23.1% |
|
Gearing |
F |
27.9% |
23.1% |
|
- Q3 on Q3 change.
- With effect from 2019, Cash capital expenditure has been
introduced as a capital spent performance measure (see Reference
C).
- With effect from 2019, the definition has been amended (see
Reference C). Comparative information has been revised.
- With effect from 2019, the definition has been amended (see
Reference E). Comparative information has been revised.
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary financial and operational disclosure for this
quarter is available at www.shell.com/investor.
The IFRS 16 impact on net debt in the third quarter 2019 was an
increase of $15,566 million. Third quarter 2019 reported Gearing
was 27.9% on an IFRS 16 basis, comparable with 23.5% on an IAS 17
basis.
The impact of IFRS 16 is presented in Note 8 “Adoption of IFRS
16 Leases” and not addressed in the performance analysis sections
of this results announcement.
THIRD QUARTER 2019 PORTFOLIO
DEVELOPMENTS
Upstream
During the quarter, Shell completed the sale of its shares in
Shell Olie-og Gasudvinding Danmark B.V., which held a 36.8%
non-operating interest in the Danish Underground Consortium, to
Norwegian Energy Company ASA for $1.9 billion.
During the quarter, Shell took the final investment decision for
the PowerNap deep-water project, a subsea tie-back to the
Shell-operated Olympus production hub, in the US Gulf of Mexico
(Shell interest 100%).
Downstream
During the quarter, Shell completed the divestment of its 50%
interest in the SASREF joint venture in the Kingdom of Saudi Arabia
to Saudi Aramco for $631 million.
PERFORMANCE BY SEGMENT
|
INTEGRATED GAS |
Quarters |
$ million |
Nine months |
Q3 20191 |
Q2 20191 |
Q3 2018 |
%2 |
|
20191 |
2018 |
% |
2,597 |
1,340 |
2,116 |
+23 |
Segment earnings |
6,731 |
7,865 |
-14 |
(77) |
(386) |
(176) |
|
Of which: Identified items (Reference A) |
(237) |
829 |
|
2,674 |
1,726 |
2,292 |
+17 |
Earnings excluding identified items |
6,968 |
7,036 |
-1 |
4,224 |
3,403 |
3,320 |
+27 |
Cash
flow from operating activities |
11,854 |
8,831 |
+34 |
894 |
738 |
688 |
|
Cash
capital expenditure3 |
2,976 |
2,558 |
|
2,303 |
836 |
864 |
|
Capital investment4 |
5,103 |
2,908 |
|
166 |
159 |
208 |
-20 |
Liquids production available for sale
(thousand b/d) |
154 |
214 |
-28 |
4,586 |
4,456 |
4,156 |
+10 |
Natural gas production available for sale (million scf/d) |
4,397 |
4,267 |
+3 |
957 |
927 |
924 |
+4 |
Total production available for sale
(thousand boe/d) |
912 |
950 |
-4 |
8.95 |
8.66 |
8.18 |
+9 |
LNG
liquefaction volumes (million tonnes) |
26.34 |
25.54 |
+3 |
18.90 |
17.95 |
17.27 |
+9 |
LNG
sales volumes (million tonnes) |
54.36 |
53.82 |
+1 |
- IFRS 16 was adopted with effect from January 1, 2019. See Note
8 “Adoption of IFRS 16 Leases”.
- Q3 on Q3 change.
- With effect from 2019, Cash capital expenditure has been
introduced as a capital spent performance measure (see Reference
C).
- With effect from 2019, the definition has been amended (see
Reference C). Comparative information has been revised.
|
Third quarter identified items primarily
reflected losses related to the fair value accounting of commodity
derivatives.
Compared with the third quarter 2018, Integrated Gas earnings
excluding identified items primarily reflected significantly
stronger contributions from LNG trading and optimisation as well as
higher volumes, partly offset by lower realised LNG, oil and gas
prices.
Compared with the third quarter 2018, production increased
mainly due to field ramp-ups in Australia and Trinidad and Tobago.
LNG liquefaction volumes increased mainly as a result of new LNG
capacity from the Prelude floating LNG facility as well as
increased feedgas availability compared with the third quarter
2018.
Compared with the third quarter 2018, cash flow from operating
activities excluding working capital movements mainly reflected
higher earnings, partly offset by increased cash outflows related
to commodity derivatives.
|
UPSTREAM |
Quarters |
$ million |
Nine months |
Q3 20191 |
Q2 20191 |
Q3 2018 |
%2 |
|
20191 |
2018 |
% |
1,722 |
1,554 |
2,249 |
-23 |
Segment earnings |
4,982 |
5,197 |
-4 |
815 |
219 |
363 |
|
Of which: Identified items (Reference A) |
1,015 |
303 |
|
907 |
1,335 |
1,886 |
-52 |
Earnings
excluding identified items |
3,967 |
4,894 |
-19 |
4,448 |
5,616 |
6,663 |
-33 |
Cash flow
from operating activities |
15,343 |
15,792 |
-3 |
2,639 |
2,342 |
3,323 |
|
Cash
capital expenditure3 |
7,482 |
8,946 |
|
2,452 |
2,700 |
2,918 |
|
Capital
investment4 |
7,889 |
8,799 |
|
1,705 |
1,683 |
1,602 |
+6 |
Liquids production available for sale
(thousand b/d) |
1,702 |
1,561 |
+9 |
5,224 |
5,640 |
6,206 |
-16 |
Natural
gas production available for sale (million scf/d) |
5,904 |
6,461 |
-9 |
2,606 |
2,656 |
2,672 |
-2 |
Total production available for sale
(thousand boe/d) |
2,720 |
2,675 |
+2 |
- IFRS 16 was adopted with effect from January 1, 2019. See Note
8 “Adoption of IFRS 16 Leases”.
- Q3 on Q3 change.
- With effect from 2019, Cash capital expenditure has been
introduced as a capital spent performance measure (see Reference
C).
- With effect from 2019, the definition has been amended (see
Reference C). Comparative information has been revised.
|
Third quarter identified items primarily
reflected a gain on sale of assets of $1,465 million, partly offset
by impairments of $344 million and a charge of $261 million related
to the impact of the weakening Brazilian real on a deferred tax
position.
Compared with the third quarter 2018, Upstream earnings
excluding identified items reflected lower realised oil, gas and
NGL prices, well write-offs in Kazakhstan as well as lower gas
production. These were partly offset by lower provisions, as well
as positive movements in deferred tax positions in contrast with
the same period a year ago.
Compared with the third quarter 2018, production decreased
mainly due to divestments, weaker operational performance and
higher maintenance activities, largely offset by field ramp-ups.
Excluding portfolio impacts, production was 2% higher than in the
same quarter a year ago.
Compared with the third quarter 2018, cash flow from operating
activities excluding working capital movements mainly reflected
lower cash earnings.
|
DOWNSTREAM |
Quarters |
$ million |
Nine months |
Q3 20191 |
Q2 20191 |
Q3 2018 |
%2 |
|
20191 |
2018 |
% |
2,574 |
1,072 |
1,709 |
+51 |
Segment earnings3 |
5,240 |
4,683 |
+12 |
421 |
(266) |
(301) |
|
Of which: Identified items (Reference A) |
(73) |
(753) |
|
2,153 |
1,338 |
2,010 |
+7 |
Earnings excluding identified
items3 |
5,313 |
5,436 |
-2 |
|
|
|
|
Of which: |
|
|
|
1,929 |
1,206 |
1,473 |
+31 |
Oil Products |
4,506 |
3,656 |
+23 |
448 |
(20) |
424 |
+6 |
Refining & Trading |
771 |
679 |
+14 |
1,481 |
1,225 |
1,049 |
+41 |
Marketing |
3,735 |
2,977 |
+25 |
224 |
132 |
537 |
-58 |
Chemicals |
806 |
1,780 |
-55 |
3,205 |
2,398 |
1,037 |
+209 |
Cash flow from operating
activities |
4,992 |
5,134 |
-3 |
2,454 |
2,176 |
1,817 |
|
Cash
capital expenditure4 |
6,301 |
4,990 |
|
2,870 |
2,731 |
1,859 |
|
Capital
investment5 |
7,471 |
5,136 |
|
2,522 |
2,632 |
2,675 |
-6 |
Refinery
processing intake (thousand b/d) |
2,606 |
2,623 |
-1 |
6,731 |
6,608 |
6,697 |
+1 |
Oil
Products sales volumes (thousand b/d) |
6,603 |
6,742 |
-2 |
3,845 |
3,787 |
4,145 |
-7 |
Chemicals
sales volumes (thousand tonnes) |
11,769 |
13,534 |
-13 |
- IFRS 16 was adopted with effect from January 1, 2019. See Note
8 “Adoption of IFRS 16 Leases”.
- Q3 on Q3 change.
- Earnings are presented on a CCS basis (See Note 2).
- With effect from 2019, Cash capital expenditure has been
introduced as a capital spent performance measure (see Reference
C).
- With effect from 2019, the definition has been amended (see
Reference C). Comparative information has been revised.
|
Third quarter identified items primarily
reflected a gain on sale of assets of $282 million and a gain of
$192 million related to the fair value accounting of commodity
derivatives, partly offset by a net charge of $52 million related
to impairments.
Compared with the third quarter 2018, Downstream earnings
excluding identified items benefited from stronger contributions
from oil products trading and optimisation and higher retail and
global commercial margins. These were partly offset by lower
realised refining, base chemicals and intermediates margins.
Compared with the third quarter 2018, cash flow from operating
activities excluding working capital movements mainly reflected
lower cash earnings and lower dividends received.
Oil Products
-
- Refining & Trading earnings excluding
identified items reflected stronger contributions from oil products
trading and optimisation, mainly fuel oil, partly offset by lower
realised refining margins, compared with the third quarter
2018.
Refinery availability was 92%, at a similar level as in the
third quarter 2018.
-
- Marketing earnings excluding identified items
reflected increased retail, lubricants and aviation margins, as
well as favourable currency exchange rate effects, compared with
the third quarter 2018.
Compared with the third quarter 2018, Oil Products sales volumes
were at a similar level.
Chemicals
-
- Chemicals earnings excluding identified items
reflected lower realised intermediates and base chemicals margins
mainly in Europe and Asia as well as lower volumes.
Chemicals manufacturing plant availability decreased to 91% from
93% in the third quarter 2018, mainly reflecting higher maintenance
activities in Europe.
|
CORPORATE |
Quarters |
$ million |
Nine months |
Q3 20191 |
Q2 20191 |
Q3 2018 |
|
20191 |
2018 |
(663) |
(789) |
(335) |
Segment earnings |
(2,122) |
(835) |
154 |
18 |
60 |
Of which: Identified items (Reference A) |
185 |
404 |
(817) |
(806) |
(395) |
Earnings excluding identified items |
(2,307) |
(1,239) |
375 |
(385) |
1,072 |
Cash flow from operating activities |
(276) |
1,307 |
- IFRS 16 was adopted with effect from January 1, 2019. See Note
8 “Adoption of IFRS 16 Leases”.
|
Third quarter identified items mainly reflected
a gain related to the impact of the weakening Brazilian real on a
deferred tax position.
Compared with the third quarter 2018, Corporate earnings
excluding identified items reflected adverse currency exchange rate
effects as well as lower tax credits.
OUTLOOK FOR THE FOURTH QUARTER 2019
Integrated Gas production is expected to be 920 – 970 thousand
boe/d. LNG liquefaction volumes are expected to be 8.8 – 9.4
million tonnes.
Upstream production is expected to be 2,650 – 2,800 thousand
boe/d.
Refinery availability is expected to be 87% – 92%.
Oil Products sales volumes are expected to be 6,650 – 7,050
thousand boe/d.
Chemicals manufacturing plant availability is expected to be 81%
– 86%.
Corporate segment earnings excluding identified items are
expected to be a net expense of $2,900 – 3,200 million for the full
year 2019. This excludes the impact of currency exchange rate
effects.
Full year 2019 Cash capital expenditure is expected to be around
the lower end of the $24 – 29 billion range.
FORTHCOMING EVENTS
The Shell Project & Technology Open House for the investor
community is scheduled to take place on November 26, 2019 in
Amsterdam.
Fourth quarter 2019 and full year results and dividends are
scheduled to be announced on January 30, 2020. First quarter 2020
results and dividends are scheduled to be announced on April 30,
2020. Second quarter 2020 and half year results and dividends are
scheduled to be announced on July 30, 2020. Third quarter 2020
results and dividends are scheduled to be announced on October 29,
2020.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
|
|
CONSOLIDATED STATEMENT
OF INCOME |
|
|
Quarters |
$ million |
Nine months |
|
Q3 20191 |
Q2 20191 |
Q3 2018 |
|
20191 |
2018 |
|
86,592 |
90,544 |
100,151 |
Revenue2 |
260,871 |
286,151 |
|
769 |
632 |
1,000 |
Share of profit of joint
ventures and associates |
2,885 |
2,755 |
|
2,180 |
662 |
397 |
Interest and
other income4 |
3,285 |
3,024 |
|
89,541 |
91,838 |
101,548 |
Total revenue
and other income |
267,041 |
291,930 |
|
63,900 |
68,590 |
76,070 |
Purchases |
192,413 |
215,719 |
|
6,002 |
6,835 |
6,256 |
Production and
manufacturing expenses |
19,191 |
20,167 |
|
2,429 |
2,881 |
2,829 |
Selling, distribution and
administrative expenses |
7,662 |
8,198 |
|
219 |
225 |
227 |
Research and
development |
656 |
672 |
|
644 |
439 |
322 |
Exploration |
1,389 |
795 |
|
6,815 |
6,699 |
5,198 |
Depreciation, depletion and
amortisation |
19,464 |
15,891 |
|
1,161 |
1,252 |
909 |
Interest
expense |
3,572 |
2,774 |
|
81,169 |
86,920 |
91,811 |
Total
expenditure |
244,346 |
264,216 |
|
8,372 |
4,917 |
9,737 |
Income/(loss) before
taxation |
22,695 |
27,714 |
|
2,348 |
1,755 |
3,696 |
Taxation
charge/(credit) |
7,351 |
9,454 |
|
6,024 |
3,162 |
6,041 |
Income/(loss) for the
period2 |
15,344 |
18,260 |
|
145 |
164 |
202 |
Income/(loss)
attributable to non-controlling interest |
466 |
498 |
|
5,879 |
2,998 |
5,839 |
Income/(loss)
attributable to Royal Dutch Shell plc shareholders |
14,878 |
17,762 |
|
0.73 |
0.37 |
0.70 |
Basic earnings per share
($)3 |
1.84 |
2.14 |
|
0.73 |
0.37 |
0.70 |
Diluted earnings
per share ($)3 |
1.83 |
2.12 |
- See Note 8 “Adoption of IFRS 16 Leases”.
- See Note 2 “Segment information”.
- See Note 3 “Earnings per share”.
- Third quarter 2019 included a gain on divestments including
Upstream Denmark, Caesar Tonga and the SASREF joint venture in
Saudi Arabia.
|
|
|
|
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME |
|
|
Quarters |
$ million |
Nine months |
|
|
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2018 |
|
|
6,024 |
3,162 |
6,041 |
Income/(loss) for the
period |
15,344 |
18,260 |
|
|
|
|
|
Other comprehensive
income/(loss) net of tax: |
|
|
|
|
|
|
|
Items that may be reclassified to income in later periods: |
|
|
|
|
(1,514) |
215 |
(500) |
- Currency translation differences
|
(1,123) |
(2,818) |
|
|
2 |
18 |
(1) |
- Debt instruments remeasurements
|
31 |
(15) |
|
|
213 |
101 |
(69) |
- Cash flow and net investment hedging gains/(losses)
|
(132) |
(769) |
|
|
5 |
79 |
43 |
|
111 |
(148) |
|
|
(45) |
(1) |
8 |
- Share of other comprehensive income/(loss) of joint ventures
and associates
|
(101) |
(27) |
|
|
(1,339) |
413 |
(519) |
Total |
(1,214) |
(3,777) |
|
|
|
|
|
Items that are not reclassified to income in later periods: |
|
|
|
|
(2,010) |
(1,172) |
615 |
- Retirement benefits remeasurements
|
(4,655) |
3,162 |
|
|
(53) |
(73) |
84 |
- Equity instruments remeasurements
|
(23) |
(203) |
|
|
1 |
(6) |
(2) |
- Share of other comprehensive income/(loss) of joint ventures
and associates
|
(4) |
(1) |
|
|
(2,062) |
(1,251) |
697 |
Total |
(4,683) |
2,958 |
|
|
(3,401) |
(839) |
178 |
Other comprehensive
income/(loss) for the period |
(5,897) |
(819) |
|
|
2,624 |
2,323 |
6,219 |
Comprehensive income/(loss)
for the period |
9,447 |
17,441 |
|
|
124 |
180 |
173 |
Comprehensive
income/(loss) attributable to non-controlling interest |
482 |
349 |
|
|
2,499 |
2,143 |
6,046 |
Comprehensive
income/(loss) attributable to Royal Dutch Shell plc
shareholders |
8,965 |
17,092 |
|
|
|
CONDENSED CONSOLIDATED
BALANCE SHEET |
|
$ million |
|
|
|
September 30, 20191 |
December 31, 2018 |
|
Assets |
|
|
|
Non-current
assets |
|
|
|
Intangible assets |
23,116 |
23,586 |
|
Property, plant and
equipment |
236,921 |
223,175 |
|
Joint ventures and
associates |
24,096 |
25,329 |
|
Investments in securities |
3,048 |
3,074 |
|
Deferred tax |
11,287 |
12,097 |
|
Retirement benefits |
2,708 |
6,051 |
|
Trade and other
receivables |
7,558 |
7,826 |
|
Derivative financial
instruments2 |
853 |
574 |
|
|
309,588 |
301,712 |
|
Current
assets |
|
|
|
Inventories |
23,240 |
21,117 |
|
Trade and other
receivables |
40,694 |
42,431 |
|
Derivative financial
instruments2 |
6,835 |
7,193 |
|
Cash and cash
equivalents |
15,417 |
26,741 |
|
|
86,186 |
97,482 |
|
Total
assets |
395,774 |
399,194 |
|
Liabilities |
|
|
|
Non-current
liabilities |
|
|
|
Debt |
76,112 |
66,690 |
|
Trade and other payables |
2,229 |
2,735 |
|
Derivative financial
instruments2 |
1,301 |
1,399 |
|
Deferred tax |
14,373 |
14,837 |
|
Retirement benefits |
14,166 |
11,653 |
|
Decommissioning and
other provisions |
19,849 |
21,533 |
|
|
128,028 |
118,847 |
|
Current
liabilities |
|
|
|
Debt |
12,812 |
10,134 |
|
Trade and other payables |
45,543 |
48,888 |
|
Derivative financial
instruments2 |
5,165 |
7,184 |
|
Taxes payable |
8,292 |
7,497 |
|
Retirement benefits |
394 |
451 |
|
Decommissioning and
other provisions |
2,960 |
3,659 |
|
|
75,165 |
77,813 |
|
Total
liabilities |
203,194 |
196,660 |
|
Equity attributable to
Royal Dutch Shell plc shareholders |
188,617 |
198,646 |
|
Non-controlling
interest |
3,964 |
3,888 |
|
Total
equity |
192,580 |
202,534 |
|
Total
liabilities and equity |
395,774 |
399,194 |
|
1. See Note 8
“Adoption of IFRS 16 Leases”.
- See Note 6 “Derivative financial instruments and debt
excluding finance lease liabilities”.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2019 (as
previously published) |
685 |
(1,260) |
16,615 |
182,606 |
198,646 |
3,888 |
202,534 |
|
Impact of IFRS
163 |
- |
- |
- |
4 |
4 |
- |
4 |
|
At January 1, 2019 (as
revised) |
685 |
(1,260) |
16,615 |
182,610 |
198,650 |
3,888 |
202,538 |
|
Comprehensive income/(loss) for the
period |
- |
- |
(5,913) |
14,878 |
8,965 |
482 |
9,447 |
|
Transfer from other comprehensive
income |
- |
- |
(56) |
56 |
- |
- |
- |
|
Dividends |
- |
- |
- |
(11,472) |
(11,472) |
(403) |
(11,875) |
|
Repurchases of shares |
(20) |
- |
20 |
(7,526) |
(7,526) |
- |
(7,526) |
|
Share-based compensation |
- |
749 |
(131) |
(619) |
(1) |
- |
(1) |
|
Other
changes in non-controlling interest |
- |
- |
- |
- |
- |
(3) |
(3) |
|
At September 30, 2019 |
666 |
(511) |
10,535 |
177,927 |
188,617 |
3,964 |
192,580 |
|
At January 1,
2018 |
696 |
(917) |
16,794 |
177,733 |
194,306 |
3,456 |
197,762 |
|
Comprehensive income/(loss) for the
period |
- |
- |
(670) |
17,762 |
17,092 |
349 |
17,441 |
|
Transfer from other comprehensive
income |
- |
- |
(1,108) |
1,108 |
- |
- |
- |
|
Dividends |
- |
- |
- |
(11,806) |
(11,806) |
(489) |
(12,295) |
|
Repurchases of shares |
(4) |
- |
4 |
(2,007) |
(2,007) |
- |
(2,007) |
|
Share-based compensation |
- |
(301) |
25 |
177 |
(99) |
- |
(99) |
|
Other
changes in non-controlling interest |
- |
- |
- |
47 |
47 |
637 |
684 |
|
At September 30, 2018 |
692 |
(1,218) |
15,045 |
183,014 |
197,533 |
3,953 |
201,486 |
|
1. See Note 4 “Share
capital”.
- See Note 5 “Other reserves”.
- See Note 8 “Adoption of IFRS 16 Leases”.
|
|
CONSOLIDATED STATEMENT
OF CASH FLOWS |
|
Quarters |
$ million |
Nine months |
|
Q3 20191 |
Q2 20191 |
Q3 2018 |
|
20191 |
2018 |
|
8,372 |
4,917 |
9,737 |
Income before taxation for the
period2 |
22,695 |
27,714 |
|
|
|
|
Adjustment for: |
|
|
|
921 |
1,030 |
690 |
- Interest expense (net) |
2,846 |
2,161 |
|
6,815 |
6,699 |
5,198 |
- Depreciation, depletion and
amortisation |
19,464 |
15,891 |
|
402 |
202 |
149 |
- Exploration well write-offs |
722 |
304 |
|
(2,039) |
(379) |
(163) |
- Net (gains)/losses on sale and
revaluation of non-current assets and businesses |
(2,483) |
(2,338) |
|
(769) |
(632) |
(1,000) |
- Share of (profit)/loss of joint
ventures and associates |
(2,885) |
(2,755) |
|
859 |
1,217 |
1,374 |
- Dividends received from joint
ventures and associates |
2,820 |
3,368 |
|
813 |
(61) |
(1,693) |
- (Increase)/decrease in
inventories |
(2,089) |
(4,871) |
|
2,644 |
308 |
(2,722) |
- (Increase)/decrease in current
receivables |
1,527 |
(6,466) |
|
(3,289) |
321 |
1,788 |
- Increase/(decrease) in current
payables |
(2,184) |
5,678 |
|
(149) |
(480) |
560 |
- Derivative financial instruments |
(1,738) |
(827) |
|
(634) |
30 |
(93) |
- Retirement benefits2 |
(582) |
232 |
|
(250) |
8 |
(434) |
- Decommissioning and other
provisions2 |
(544) |
(973) |
|
67 |
(39) |
535 |
- Other2 |
54 |
719 |
|
(1,511) |
(2,110) |
(1,834) |
Tax
paid |
(5,710) |
(6,773) |
|
12,252 |
11,031 |
12,092 |
Cash flow from operating activities |
31,913 |
31,064 |
|
(5,992) |
(5,150) |
(5,800) |
Capital expenditure |
(16,264) |
(15,864) |
|
(30) |
(160) |
(78) |
Investments in joint ventures and
associates |
(631) |
(672) |
|
(76) |
(26) |
(24) |
Investments in equity securities2 |
(141) |
(112) |
|
2,932 |
644 |
231 |
Proceeds from sale of property, plant
and equipment and businesses |
3,754 |
2,400 |
|
922 |
102 |
935 |
Proceeds from sale of joint ventures
and associates |
1,567 |
1,119 |
|
126 |
17 |
188 |
Proceeds from sale of equity
securities2 |
414 |
4,408 |
|
229 |
220 |
236 |
Interest received |
686 |
602 |
|
732 |
592 |
588 |
Other investing cash inflows2 |
2,004 |
1,299 |
|
(973) |
(404) |
(358) |
Other
investing cash outflows2 |
(2,308) |
(1,527) |
|
(2,130) |
(4,166) |
(4,082) |
Cash flow from investing activities |
(10,918) |
(8,347) |
|
2,009 |
145 |
(155) |
Net increase/(decrease) in debt with
maturity periodwithin three months |
2,063 |
(416) |
|
|
|
|
Other debt: |
|
|
|
142 |
180 |
424 |
- New borrowings |
462 |
788 |
|
(7,180) |
(2,848) |
(2,260) |
- Repayments |
(11,561) |
(7,232) |
|
(1,088) |
(1,214) |
(864) |
Interest paid |
(3,417) |
(2,648) |
|
76 |
45 |
- |
Derivative financial instruments2 |
76 |
- |
|
- |
- |
(1) |
Change in non-controlling interest |
(2) |
673 |
|
|
|
|
Cash dividends paid to: |
|
|
|
(3,773) |
(3,825) |
(3,949) |
- Royal Dutch Shell plc
shareholders |
(11,473) |
(11,806) |
|
(133) |
(203) |
(134) |
- Non-controlling interest |
(404) |
(486) |
|
(2,944) |
(2,142) |
(1,414) |
Repurchases of shares |
(7,340) |
(1,414) |
|
(94) |
(7) |
(2) |
Shares
held in trust: net sales/(purchases) and dividends received |
(557) |
(1,088) |
|
(12,985) |
(9,868) |
(8,355) |
Cash flow from financing activities |
(32,153) |
(23,629) |
|
(190) |
4 |
(11) |
Currency translation differences relating to cash and cash
equivalents |
(166) |
(288) |
|
(3,054) |
(3,000) |
(356) |
Increase/(decrease) in cash and cash
equivalents |
(11,324) |
(1,200) |
|
18,470 |
21,470 |
19,468 |
Cash and cash equivalents at beginning of
period |
26,741 |
20,312 |
|
15,417 |
18,470 |
19,112 |
Cash and cash equivalents at end of period |
15,417 |
19,112 |
|
|
|
|
|
|
|
- See Note 8 “Adoption of IFRS 16 Leases”.
- See Note 7 “Change in presentation of Consolidated Statement of
Cash Flows”.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
- 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 European Union, and on
the basis of the same accounting principles as those used in the
Annual Report and Form 20-F for the year ended December 31, 2018
(pages 167 to 214) as filed with the US Securities and Exchange
Commission, except for the adoption of IFRS 16 Leases on January 1,
2019, and should be read in conjunction with that filing.
Under IFRS 16, all lease contracts, with limited exceptions, are
recognised in financial statements by way of right-of-use assets
and corresponding lease liabilities. Shell applied the modified
retrospective transition method without restating comparative
information. Further information in respect of the implementation
of IFRS 16 is included in Note 8.
In March 2019, the IFRS Interpretations Committee (IFRIC) made
its agenda decision regarding “Physical settlement of contracts to
buy or sell a non-financial item (IFRS 9)”. The impact of this
decision is under review.
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, 2018 were
published in Shell’s Annual Report and Form 20-F and a copy was
delivered to the Registrar of Companies for England and Wales. 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.
- 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.
With the adoption of IFRS 16, the interest expense on leases
formerly classified as operating leases is reported under the
Corporate segment, while depreciation related to the respective
right-of-use assets is reported in the segments making use of the
assets. This treatment is consistent with the existing treatment
for leases formerly classified as finance leases.
|
|
INFORMATION BY
SEGMENT |
|
Quarters |
$ million |
Nine months |
|
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2018 |
|
|
|
|
Third-party
revenue |
|
|
|
9,735 |
8,942 |
10,848 |
Integrated Gas |
30,316 |
31,862 |
|
2,347 |
2,457 |
1,769 |
Upstream |
7,237 |
6,687 |
|
74,499 |
79,131 |
87,518 |
Downstream |
223,282 |
247,563 |
|
12 |
13 |
16 |
Corporate |
36 |
39 |
|
86,592 |
90,544 |
100,151 |
Total third-party revenue1 |
260,871 |
286,151 |
|
|
|
|
Inter-segment
revenue2 |
|
|
|
1,025 |
1,045 |
1,276 |
Integrated Gas |
3,162 |
3,705 |
|
8,144 |
8,996 |
10,526 |
Upstream |
26,840 |
28,924 |
|
267 |
234 |
259 |
Downstream |
840 |
762 |
|
- |
- |
- |
Corporate |
- |
- |
|
|
|
|
CCS
earnings |
|
|
|
2,597 |
1,340 |
2,116 |
Integrated Gas |
6,731 |
7,865 |
|
1,722 |
1,554 |
2,249 |
Upstream |
4,982 |
5,197 |
|
2,574 |
1,072 |
1,709 |
Downstream |
5,240 |
4,683 |
|
(663) |
(789) |
(335) |
Corporate |
(2,122) |
(835) |
|
6,230 |
3,177 |
5,739 |
Total |
14,831 |
16,910 |
|
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 2019 included
income of $1,460 million (Q2 2019: $969 million income; nine months
2019: $3,166 million income).
- Inter-segment revenue has been revised to amend for
transactions within segments that were previously reported as
inter-segment revenue, and vice versa. Comparative information has
been revised. The amounts previously reported as inter-segment
revenue for Integrated Gas were Q2 2019: $1,005 million, Q3 2018:
$1,242 million and nine months 2018: $3,601 million. The amounts
previously reported as inter-segment revenue for Downstream were Q2
2019: $1,316 million, Q3 2018: $1,559 million and nine months 2018:
$4,280 million.
|
|
|
|
RECONCILIATION OF INCOME
FOR THE PERIOD TO CCS EARNINGS |
|
Quarters |
$ million |
Nine months |
|
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2018 |
|
5,879 |
2,998 |
5,839 |
Income/(loss) attributable to Royal
Dutch Shell plc shareholders |
14,878 |
17,762 |
|
145 |
164 |
202 |
Income/(loss) attributable to
non-controlling interest |
466 |
498 |
|
6,024 |
3,162 |
6,041 |
Income/(loss) for the period |
15,344 |
18,260 |
|
|
|
|
Current cost of supplies
adjustment: |
|
|
|
240 |
30 |
(381) |
Purchases |
(715) |
(1,760) |
|
(56) |
1 |
95 |
Taxation |
181 |
435 |
|
22 |
(16) |
(16) |
Share
of profit/(loss) of joint ventures and associates |
21 |
(25) |
|
206 |
15 |
(302) |
Current cost of supplies adjustment1 |
(513) |
(1,350) |
|
6,230 |
3,177 |
5,739 |
CCS earnings |
14,831 |
16,910 |
|
|
|
|
of which: |
|
|
|
6,081 |
3,025 |
5,570 |
CCS earnings attributable to Royal
Dutch Shell plc shareholders |
14,399 |
16,499 |
|
149 |
152 |
169 |
CCS
earnings attributable to non-controlling interest |
432 |
411 |
|
|
1. The adjustment
attributable to Royal Dutch Shell plc shareholders is a positive
$202 million in the third quarter 2019 (Q2 2019: positive $27
million; Q3 2018: negative $269 million; nine months 2019: negative
$479 million; nine months 2018: negative $1,263 million). |
|
|
|
|
|
|
|
|
|
- Earnings per share
|
|
EARNINGS PER
SHARE |
|
Quarters |
|
Nine months |
|
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2018 |
|
5,879 |
2,998 |
5,839 |
Income/(loss) attributable
to Royal Dutch Shell plc shareholders ($ million) |
14,878 |
17,762 |
|
|
|
|
Weighted average number of
shares used as the basis for determining: |
|
|
|
8,017.5 |
8,100.8 |
8,290.3 |
Basic earnings per share (million) |
8,097.6 |
8,301.4 |
|
8,067.6 |
8,153.7 |
8,353.1 |
Diluted earnings per share (million) |
8,151.4 |
8,368.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 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,
2019 |
4,471,889,296 |
3,745,486,731 |
376 |
309 |
685 |
Repurchases of shares |
(227,226,527) |
(11,488,283) |
(19) |
(1) |
(20) |
At September 30, 2019 |
4,244,662,769 |
3,733,998,448 |
357 |
308 |
665 |
|
|
|
|
|
|
At January 1,
2018 |
4,597,136,050 |
3,745,486,731 |
387 |
309 |
696 |
Repurchases of shares |
(43,054,969) |
- |
(4) |
- |
(4) |
At September 30, 2018 |
4,554,081,081 |
3,745,486,731 |
383 |
309 |
692 |
- Share capital at September 30, 2019 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 21,
2019, 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 €190 million
(representing 2,720 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 21, 2020,
and the end of the Annual General Meeting to be held in 2020,
unless previously renewed, revoked or varied by Royal Dutch Shell
plc in a general meeting.
- Other reserves
|
|
OTHER RESERVES |
$ million |
Merger reserve |
Share premium reserve |
Capital redemption reserve |
Share plan reserve |
Accumulated other comprehensive income |
Total |
|
At January 1, 2019 |
37,298 |
154 |
95 |
1,098 |
(22,030) |
16,615 |
|
Other comprehensive income/(loss)
attributable to Royal Dutch Shell plc shareholders |
- |
- |
- |
- |
(5,913) |
(5,913) |
|
Transfer from other comprehensive
income |
- |
- |
- |
- |
(56) |
(56) |
|
Repurchases of shares |
- |
- |
20 |
- |
- |
20 |
|
Share-based compensation |
- |
- |
- |
(131) |
- |
(131) |
|
At September 30, 2019 |
37,296 |
154 |
116 |
966 |
(27,998) |
10,535 |
|
At
January 1, 2018 |
37,298 |
154 |
84 |
1,440 |
(22,182) |
16,794 |
|
Other comprehensive income/(loss)
attributable to Royal Dutch Shell plc shareholders |
- |
- |
- |
- |
(670) |
(670) |
|
Transfer from other comprehensive
income |
- |
- |
- |
- |
(1,108) |
(1,108) |
|
Repurchases of shares |
- |
- |
4 |
- |
- |
4 |
|
Share-based compensation |
- |
- |
- |
25 |
- |
25 |
|
At September 30, 2018 |
37,298 |
154 |
88 |
1,465 |
(23,960) |
15,045 |
|
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.
- Derivative financial instruments and debt
excluding lease liabilities
As disclosed in the Consolidated Financial Statements for the
year ended December 31, 2018, presented in the Annual Report 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, 2019 are consistent with those used in
the year ended December 31, 2018, 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, 2019 |
December 31, 2018 |
|
Carrying amount |
57,839 |
62,798 |
|
Fair value1 |
63,345 |
64,708 |
|
1. Mainly determined from the prices quoted for these
securities. |
|
|
|
|
|
|
|
|
- Change in presentation of Consolidated
Statement of Cash Flows
With effect from January 1, 2019, the starting point for the
Consolidated Statement of Cash Flows is ‘Income before taxation’
(previously: Income). Furthermore, to improve transparency,
“Retirement benefits” and “Decommissioning and other provisions”
have been separately disclosed. The “Other” component of cash flow
from investing activities has been expanded to distinguish between
cash inflows and outflows. Prior period comparatives for these line
items have been revised to conform with current year presentation.
In addition, a new line item, “Derivative financial instruments”,
has been introduced to cash flow from financing activities.
Overall, the revisions do not have an impact on cash flow from
operating activities, cash flow from investing activities or cash
flow from financing activities, as previously published.
- Adoption of IFRS 16 Leases
IFRS 16 was adopted with effect from January 1, 2019. Under the
new standard, all lease contracts, with limited exceptions, are
recognised in the financial statements by way of right-of-use
assets and corresponding lease liabilities. Shell applied the
modified retrospective transition method, and consequently
comparative information is not restated. As a practical expedient,
no reassessment was performed of contracts that were previously
identified as leases and contracts that were not previously
identified as containing a lease applying IAS 17 Leases and IFRIC 4
Determining whether an Arrangement contains a Lease. At January 1,
2019, additional lease liabilities were recognised for leases
previously classified as operating leases applying IAS 17. These
lease liabilities were measured at the present value of the
remaining lease payments, discounted using entity-specific
incremental borrowing rates at January 1, 2019. In general, a
corresponding right-of-use asset was recognised for an amount equal
to each lease liability, adjusted by the amount of any prepaid or
accrued lease payment relating to the specific lease contract, as
recognised on the balance sheet at December 31, 2018. Provisions
for onerous lease contracts at December 31, 2018 were adjusted to
the respective right-of-use assets recognised at January 1,
2019.The reconciliation of differences between the operating lease
commitments disclosed under the prior standard and the additional
lease liabilities recognised on the balance sheet at January 1,
2019 is as follows:
|
|
LEASE LIABILITIES RECONCILIATION |
$ million |
|
|
Undiscounted future
minimum lease payments under operating leases at December 31,
2018 |
24,219 |
|
Impact of discounting1 |
|
|
|
|
|
(5,167) |
|
Leases not yet commenced at January 1, 2019 |
|
|
|
(2,586) |
|
Short-term leases2 |
|
|
|
|
|
(277) |
|
Long-term leases expiring before December 31, 20192 |
|
|
|
|
(192) |
|
Other reconciling items (net) |
|
|
|
|
|
40 |
|
Additional lease liability at January 1, 2019 |
|
|
|
|
16,037 |
|
Finance lease liability at December 31, 2018 |
|
|
|
|
14,026 |
|
Total lease liability at January 1, 2019 |
|
|
|
|
|
30,063 |
|
|
|
|
|
|
|
|
|
|
1. Under the modified retrospective transition
method, lease payments were discounted at January 1, 2019 using an
incremental borrowing rate representing the rate of interest that
the entity within Shell that entered into the lease would have to
pay to borrow over a similar term, and with a similar security, the
funds necessary to obtain an asset of a similar value to the
right-of-use asset in a similar economic environment. The
incremental borrowing rate applied to each lease was determined
taking into account the risk-free rate, adjusted for factors such
as the credit rating of the contracting entity and the terms and
conditions of the lease. The weighted average incremental borrowing
rate applied by Shell upon transition was 7.2%.
2. Shell has applied the practical expedient to
classify leases for which the lease term ends within 12 months of
the date of initial application of IFRS 16 as short-term leases.
Shell has also applied the recognition exemption for short-term
leases.
Compared with the previous accounting for operating leases under
IAS 17, the application of the new standard has a significant
impact on the classification of expenditures and cash flows. It
also impacts the timing of expenses recognised in the statement of
income.
With effect from 2019, expenses related to leases previously
classified as operating leases are presented under Depreciation,
depletion and amortisation and Interest expense (in 2018 these were
mainly reported in Purchases, Production and manufacturing
expenses, and Selling, distribution and administrative
expenses).
With effect from 2019, payments related to leases previously
classified as operating leases are presented under Cash flow from
financing activities (in 2018 these were reported in Cash flow from
operating activities and Cash flow from investing activities).
The adoption of the new standard had an accumulated impact of $4
million in equity following the recognition of lease liabilities of
$16,037 million and additional right-of-use assets of $15,558
million and reclassifications mainly related to pre-paid leases and
onerous contracts previously recognised.
The detailed impact on the balance sheet at January 1, 2019, is
as follows:
|
|
CONDENSED CONSOLIDATED BALANCE SHEET |
$ million |
|
|
|
|
December 31, 2018 |
IFRS 16 impact |
January 1, 2019 |
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
23,586 |
|
23,586 |
|
Property, plant and equipment |
223,175 |
15,558 |
238,733 |
|
Joint ventures and associates |
25,329 |
|
25,329 |
|
Investments in securities |
3,074 |
|
3,074 |
|
Deferred tax |
12,097 |
|
12,097 |
|
Retirement benefits |
6,051 |
|
6,051 |
|
Trade and other receivables1 |
7,826 |
(814) |
7,012 |
|
Derivative financial instruments4 |
574 |
|
574 |
|
|
301,712 |
14,744 |
316,456 |
|
Current assets |
|
|
|
|
Inventories |
21,117 |
|
21,117 |
|
Trade and other receivables |
42,431 |
69 |
42,500 |
|
Derivative financial instruments4 |
7,193 |
|
7,193 |
|
Cash and
cash equivalents |
26,741 |
|
26,741 |
|
|
97,482 |
69 |
97,551 |
|
Total assets |
399,194 |
14,813 |
414,007 |
|
Liabilities |
|
|
|
|
Non-current
liabilities |
|
|
|
|
Debt |
66,690 |
13,125 |
79,815 |
|
Trade and other payables2 |
2,735 |
(540) |
2,195 |
|
Derivative financial instruments4 |
1,399 |
|
1,399 |
|
Deferred tax |
14,837 |
|
14,837 |
|
Retirement benefits |
11,653 |
|
11,653 |
|
Decommissioning and other provisions3 |
21,533 |
(347) |
21,186 |
|
|
118,847 |
12,238 |
131,085 |
|
Current liabilities |
|
|
|
|
Debt |
10,134 |
2,912 |
13,046 |
|
Trade and other payables |
48,888 |
(23) |
48,865 |
|
Derivative financial instruments4 |
7,184 |
|
7,184 |
|
Taxes payable |
7,497 |
|
7,497 |
|
Retirement benefits |
451 |
|
451 |
|
Decommissioning and other provisions3 |
3,659 |
(318) |
3,341 |
|
|
77,813 |
2,571 |
80,384 |
|
Total liabilities |
196,660 |
14,809 |
211,469 |
|
Equity attributable to Royal Dutch
Shell plc shareholders |
198,646 |
4 |
198,650 |
|
Non-controlling interest |
3,888 |
|
3,888 |
|
Total equity |
202,534 |
4 |
202,538 |
|
Total liabilities and equity |
399,194 |
14,813 |
414,007 |
|
|
|
|
|
|
|
1. Mainly in respect of pre-paid leases.
- Mainly related to operating lease contracts that were
measured at fair value under IFRS 3 Business Combinations following
the acquisition of BG in 2016.
- Mainly in respect of onerous contracts.
- See Note 6 “Derivative financial instruments and debt excluding
lease liabilities”.
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
Impact of IFRS 16 Leases
IFRS 16 Leases primarily impacts the following key measures of
Shell’s financial performance: Segment earnings; Cash flow from
operating activities; Cash flow from operating activities excluding
working capital movements; Free cash flow; Capital investment and
Cash capital expenditure; Operating expenses; Gearing; and Return
on average capital employed.
As explained in Note 8 “Adoption of IFRS 16 Leases”, in
accordance with Shell’s use of the modified retrospective
transition method, comparative information for prior years is not
restated, and continues to be presented as reported under IAS
17.
Additional information is provided in this section of the report
to provide indicative impacts of Shell’s transition from IAS 17 to
IFRS 16. In addition to the IFRS 16 reported basis, impacted
Alternative Performance Measures are presented on an IAS 17 basis,
to enable like-for-like comparisons between 2019 and 2018. For
2019, information on an IAS 17 basis represents estimates for the
purpose of transition.
- Identified items
Identified items comprise: divestment gains and losses,
impairments, fair value accounting of commodity derivatives and
certain gas contracts, redundancy and restructuring, the impact of
exchange rate movements on certain deferred tax balances, and other
items. These items, either individually or collectively, can cause
volatility to net income, in some cases driven by external factors,
which may hinder the comparative understanding of Shell’s financial
results from period to period. The impact of identified items on
Shell’s CCS earnings is shown as follows:
|
IDENTIFIED
ITEMS |
Quarters |
$ million |
Nine months |
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2018 |
|
|
|
Identified items before
tax |
|
|
2,039 |
379 |
163 |
- Divestment gains/(losses)
|
2,483 |
2,356 |
(509) |
(672) |
253 |
|
(1,214) |
(582) |
47 |
12 |
(239) |
- Fair value accounting of commodity derivatives and certain gas
contracts
|
(14) |
(494) |
6 |
(27) |
(68) |
- Redundancy and restructuring
|
(74) |
(171) |
- |
(437) |
(9) |
|
(437) |
51 |
1,584 |
(746) |
100 |
Total identified items before tax |
744 |
1,160 |
|
|
|
Tax impact |
|
|
(283) |
(123) |
(41) |
- Divestment gains/(losses)
|
(425) |
(207) |
79 |
226 |
(143) |
|
293 |
(114) |
44 |
(10) |
70 |
- Fair value accounting of commodity derivatives and certain gas
contracts
|
137 |
190 |
(4) |
14 |
10 |
- Redundancy and restructuring
|
30 |
57 |
(106) |
16 |
(52) |
- Impact of exchange rate movements on tax balances
|
(98) |
(357) |
- |
208 |
2 |
|
208 |
54 |
(271) |
331 |
(154) |
Total tax impact |
146 |
(377) |
|
|
|
Identified items after
tax |
|
|
1,756 |
256 |
122 |
- Divestment gains/(losses)
|
2,058 |
2,149 |
(430) |
(446) |
110 |
|
(921) |
(696) |
91 |
1 |
(169) |
- Fair value accounting of commodity derivatives and certain gas
contracts
|
124 |
(304) |
2 |
(13) |
(58) |
- Redundancy and restructuring
|
(43) |
(114) |
(106) |
16 |
(52) |
- Impact of exchange rate movements on tax balances
|
(98) |
(357) |
- |
(229) |
(7) |
|
(229) |
105 |
1,313 |
(415) |
(54) |
Impact on CCS earnings |
890 |
783 |
|
|
|
Of which: |
|
|
(77) |
(386) |
(176) |
Integrated Gas |
(237) |
829 |
815 |
219 |
363 |
Upstream |
1,015 |
303 |
421 |
(266) |
(301) |
Downstream |
(73) |
(753) |
154 |
18 |
60 |
Corporate |
185 |
404 |
- |
22 |
- |
Impact
on CCS earnings attributable to non-controlling interest |
22 |
- |
1,313 |
(437) |
(54) |
Impact
on CCS earnings attributable to shareholders |
868 |
783 |
The reconciliation from income attributable to RDS plc
shareholders to CCS earnings attributable to RDS plc shareholders
excluding identified items is shown on page 1.
The categories above represent the nature of the items
identified irrespective of whether the items relate to Shell
subsidiaries or joint ventures and associates. The after-tax impact
of identified items of joint ventures and associates is 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 G).
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. 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 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 Shell’s management assesses should be excluded to
provide additional insight, such as the impact arising from changes
in tax legislation and certain provisions for onerous contracts or
litigation.
- Basic CCS earnings per share
Basic CCS earnings per share is calculated as CCS earnings
attributable to Royal Dutch Shell plc shareholders (see Note 2),
divided by the weighted average number of shares used as the basis
for basic earnings per share (see Note 3).
- Capital investment and Cash capital
expenditure
Capital investment is a measure used to make decisions about
allocating resources and assessing performance. It comprises
Capital expenditure, Investments in joint ventures and associates
and Investments in equity securities, exploration expense excluding
well write-offs, leases recognised in the period and other
adjustments.
The definition reflects two changes with effect from January 1,
2019, for simplicity reasons. Firstly, “Investments in equity
securities” now includes investments under the Corporate segment
and is aligned with the line introduced in the Consolidated
Statement of Cash Flows from January 1, 2019. Secondly, the
adjustments previously made to bring the Capital investment measure
onto an accruals basis no longer apply. Comparative information has
been revised.
“Cash capital expenditure” was introduced with effect from
January 1, 2019, to monitor investing activities on a cash basis,
excluding items such as lease additions which do not necessarily
result in cash outflows in the period. The measure comprises the
following lines from the Consolidated Statement of Cash flows:
Capital expenditure, Investments in joint ventures and associates
and Investments in equity securities.
The reconciliation of “Capital expenditure” to “Cash capital
expenditure” and “Capital investment” is as follows. Information
for 2019 is also presented on an “IAS 17 basis” to enable
like-for-like performance comparisons with 2018.
|
|
|
Quarters |
$ million |
Nine months |
Q3 2019 |
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2019 |
2018 |
As Reported |
IAS 17 basis |
As revised |
As revised |
|
As Reported |
IAS 17 basis |
As revised |
5,992 |
6,155 |
5,150 |
5,800 |
Capital expenditure |
16,264 |
16,688 |
15,864 |
30 |
30 |
160 |
78 |
Investments in joint ventures and
associates |
631 |
631 |
672 |
76 |
76 |
26 |
24 |
Investments in equity securities |
141 |
141 |
112 |
6,098 |
6,260 |
5,337 |
5,902 |
Cash capital
expenditure |
17,036 |
17,460 |
16,648 |
|
|
|
|
Of which: |
|
|
|
894 |
898 |
738 |
688 |
Integrated Gas |
2,976 |
2,979 |
2,558 |
2,639 |
2,798 |
2,342 |
3,323 |
Upstream |
7,482 |
7,900 |
8,946 |
2,454 |
2,454 |
2,176 |
1,817 |
Downstream |
6,301 |
6,304 |
4,990 |
111 |
111 |
81 |
75 |
Corporate |
277 |
277 |
155 |
244 |
244 |
237 |
172 |
Exploration expense, excluding exploration
wells written off |
668 |
668 |
489 |
1,902 |
1,370 |
773 |
184 |
Leases recognised in the period |
3,634 |
1,511 |
403 |
(484) |
(484) |
(7) |
(541) |
Other
adjustments |
(553) |
(553) |
(541) |
7,759 |
7,390 |
6,341 |
5,717 |
Capital investment |
20,785 |
19,086 |
16,999 |
|
|
|
|
Of which: |
|
|
|
2,303 |
2,294 |
836 |
864 |
Integrated Gas |
5,103 |
4,557 |
2,908 |
2,452 |
2,530 |
2,700 |
2,918 |
Upstream |
7,889 |
7,920 |
8,799 |
2,870 |
2,455 |
2,731 |
1,859 |
Downstream |
7,471 |
6,332 |
5,136 |
134 |
111 |
73 |
75 |
Corporate |
322 |
277 |
156 |
|
|
|
|
|
|
|
|
|
- Divestments
Following completion of the $30 billion divestment programme for
2016-18, the Divestments measure was discontinued with effect from
January 1, 2019.
- 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 a CCS basis excluding identified items.
Both measures refer to Capital employed which consists of total
equity, current debt and non-current debt. Information for 2019 is
also presented on an “IAS 17 basis” to enable like-for-like
performance comparisons with 2018.
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. The after-tax interest expense is calculated using
the effective tax rate for the same period.
|
|
$ million |
|
Quarters |
|
Q3 2019 |
Q3 2019 |
Q2 2019 |
Q3 2018 |
As reported |
IAS 17 basis |
As reported |
As reported |
Income - current and
previous three quarters |
20,989 |
21,148 |
21,006 |
22,197 |
Interest expense
after tax - current and previous three quarters |
3,115 |
2,640 |
2,819 |
2,434 |
Income
before interest expense - current and previous three
quarters |
24,105 |
23,788 |
23,825 |
24,632 |
Capital employed –
opening |
279,864 |
279,864 |
281,711 |
286,889 |
Capital employed
– closing |
281,505 |
265,935 |
288,900 |
279,864 |
Capital
employed – average |
280,684 |
272,900 |
285,306 |
283,376 |
ROACE on
a Net income basis |
8.6% |
8.7% |
8.4% |
8.7% |
|
|
|
|
|
|
|
|
|
ROACE on a CCS basis excluding identified
items
In this calculation, the sum of CCS earnings 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. The
after-tax interest expense is calculated using the effective tax
rate for the same period.
This definition reflects two changes with effect from January 1,
2019. Firstly, the calculation considers “CCS earnings excluding
identified items” instead of “CCS earnings attributable to Royal
Dutch Shell plc shareholders excluding identified items” used under
the previous definition. This change ensures consistency with the
basis for average capital employed. Secondly, the calculation adds
back the after-tax interest expense. This change is made for
consistency with peers. Comparative information has been
revised.
|
|
$ million |
Quarters |
|
Q3 2019 |
Q3 2019 |
Q2 2019 |
Q3 2018 |
As reported |
IAS 17 basis |
As revised |
As revised |
CCS earnings - current and
previous three quarters |
22,284 |
22,443 |
21,794 |
20,086 |
Identified items -
current and previous three quarters |
2,536 |
2,536 |
1,169 |
(438) |
Interest expense
after tax - current and previous three quarters |
3,115 |
2,640 |
2,819 |
2,434 |
CCS
earnings excluding identified items before interest expense -
current and previous three quarters |
22,864 |
22,547 |
23,444 |
22,958 |
Capital
employed – average |
280,684 |
272,900 |
285,306 |
283,376 |
ROACE on
a CCS basis excluding identified items |
8.1% |
8.3% |
8.2% |
8.1% |
|
|
|
|
|
|
- Gearing
Gearing is a key 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.
Information for 2019 is also presented on an “IAS 17 basis” to
enable like-for-like performance comparisons with 2018.
|
|
$ million |
Quarters |
|
Q3 2019 |
Q3 2019 |
Q2 2019 |
Q3 2018 |
As reported |
IAS 17 basis |
As reported |
As reported |
Current debt |
12,812 |
9,596 |
16,617 |
13,923 |
Non-current
debt |
76,112 |
63,762 |
76,029 |
64,455 |
Total debt1 |
88,924 |
73,358 |
92,646 |
78,378 |
Add: Debt-related
derivative financial instruments: net liability/(asset) |
1,013 |
1,013 |
634 |
1,247 |
Add: Collateral on
debt-related derivatives: net liability/(asset) |
148 |
148 |
78 |
- |
Less: Cash and cash
equivalents |
(15,417) |
(15,417) |
(18,470) |
(19,112) |
Net debt |
74,668 |
59,102 |
74,887 |
60,513 |
Add: Total
equity |
192,580 |
192,577 |
196,254 |
201,486 |
Total
capital |
267,249 |
251,679 |
271,142 |
261,999 |
Gearing |
27.9% |
23.5% |
27.6% |
23.1% |
|
|
|
|
|
|
- Includes lease liabilities of $31,085 million at September 30,
2019, $30,758 million at June 30, 2019, and finance lease
liabilities of $14,277 million at September 30, 2018.
- 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 measures
Shell’s total operating expenses performance excluding identified
items.
Information for 2019 is also presented on an “IAS 17 basis” to
enable like-for-like performance comparisons with 2018.
|
|
|
|
Quarters |
$ million |
Nine months |
|
Q3 2019 |
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2019 |
2018 |
|
As reported |
IAS 17 basis |
As reported |
As reported |
|
As reported |
IAS 17 basis |
As reported |
|
6,002 |
|
6,835 |
6,256 |
Production and manufacturing
expenses |
19,191 |
|
20,167 |
|
2,429 |
|
2,881 |
2,829 |
Selling, distribution and administrative
expenses |
7,662 |
|
8,198 |
|
219 |
|
225 |
227 |
Research and development |
656 |
|
672 |
|
8,650 |
9,163 |
9,941 |
9,312 |
Operating expenses |
27,509 |
28,871 |
29,037 |
|
|
|
|
|
Of which identified items: |
|
|
|
|
7 |
7 |
(27) |
(64) |
(Redundancy and restructuring charges)/reversal |
(72) |
(72) |
(159) |
|
- |
- |
(306) |
- |
(Provisions)/reversal |
(306) |
(306) |
- |
|
- |
- |
(131) |
- |
Other |
(131) |
(131) |
- |
|
7 |
7 |
(464) |
(64) |
|
(509) |
(509) |
(159) |
|
8,657 |
9,170 |
9,477 |
9,248 |
Underlying operating expenses |
27,000 |
28,362 |
28,878 |
|
H. 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 businesses. 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.
Information for 2019 is also presented on an “IAS 17 basis” to
enable like-for-like performance comparisons with 2018.
|
|
|
|
Quarters |
$ million |
Nine months |
Q3 2019 |
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2019 |
2018 |
As reported |
IAS 17 basis |
As reported |
As reported |
|
As reported |
IAS 17 basis |
As reported |
12,252 |
11,285 |
11,031 |
12,092 |
Cash flow from operating activities |
31,913 |
29,087 |
31,064 |
(2,130) |
(2,292) |
(4,166) |
(4,082) |
Cash
flow from investing activities |
(10,918) |
(11,342) |
(8,347) |
10,122 |
8,993 |
6,865 |
8,010 |
Free cash flow |
20,995 |
17,746 |
22,717 |
3,979 |
3,979 |
763 |
1,355 |
Less:
Cash inflows related to divestments1 |
5,736 |
5,736 |
7,927 |
4 |
4 |
77 |
- |
Add:
Tax paid on divestments (reported under “Other investing cash
outflows”) |
80 |
80 |
45 |
484 |
484 |
7 |
883 |
Add:
Cash outflows related to inorganic capital expenditure2 |
849 |
849 |
1,669 |
6,630 |
5,501 |
6,186 |
7,538 |
Organic free cash flow3 |
16,189 |
12,939 |
16,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Cash inflows related to divestments includes Proceeds from
sale of property, plant and equipment and businesses, Proceeds from
sale of joint ventures and associates, and Proceeds from sale of
equity securities as reported in the Consolidated Statement of Cash
Flows.
2. 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.
3. Free cash flow less inflows related to divestments, adding
back outflows related to inorganic expenditure.
- 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.
Information for 2019 is also presented on an “IAS 17 basis” to
enable like-for-like performance comparisons with 2018.
|
|
|
|
Quarters |
$ million |
Nine months |
Q3 2019 |
Q3 2019 |
Q2 2019 |
Q3 2018 |
|
2019 |
2019 |
2018 |
As reported |
IAS 17 basis |
As reported |
As reported |
|
As reported |
IAS 17 basis |
As reported |
12,252 |
11,285 |
11,031 |
12,092 |
Cash flow from operating
activities |
31,913 |
29,087 |
31,064 |
|
|
|
|
Of which: |
|
|
|
4,224 |
3,939 |
3,403 |
3,320 |
Integrated Gas |
11,854 |
11,015 |
8,831 |
4,448 |
4,252 |
5,616 |
6,663 |
Upstream |
15,343 |
14,746 |
15,792 |
3,205 |
2,719 |
2,398 |
1,037 |
Downstream |
4,992 |
3,602 |
5,134 |
375 |
375 |
(385) |
1,072 |
Corporate |
(276) |
(277) |
1,307 |
813 |
813 |
(61) |
(1,693) |
-
(Increase)/decrease in inventories |
(2,089) |
(2,089) |
(4,871) |
2,644 |
2,644 |
308 |
(2,722) |
- (Increase)/decrease in current
receivables |
1,527 |
1,527 |
(6,466) |
(3,289) |
(3,289) |
321 |
1,788 |
- Increase/(decrease) in current
payables |
(2,184) |
(2,184) |
5,678 |
168 |
168 |
569 |
(2,627) |
(Increase)/decrease in working capital |
(2,746) |
(2,746) |
(5,659) |
12,083 |
11,117 |
10,462 |
14,719 |
Cash flow from operating activities excluding working
capital movements |
34,658 |
31,833 |
36,723 |
|
|
|
|
Of which: |
|
|
|
4,271 |
3,987 |
2,824 |
3,741 |
Integrated Gas |
10,811 |
9,973 |
9,684 |
4,722 |
4,526 |
5,378 |
7,294 |
Upstream |
15,490 |
14,893 |
16,768 |
3,169 |
2,683 |
2,462 |
2,923 |
Downstream |
8,622 |
7,232 |
9,540 |
(80) |
(80) |
(202) |
761 |
Corporate |
(265) |
(265) |
731 |
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 “Royal Dutch Shell” 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 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 US Private Securities Litigation Reform Act of
1995) concerning the financial condition, results of operations and
businesses of Royal Dutch 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
Royal Dutch 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”, “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 Royal Dutch
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, 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; and (m)
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’s Form 20-F for the year ended
December 31, 2018 (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 31, 2019.
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.
This Report contains references to Shell’s website. These
references are for the readers’ convenience only. Shell is not
incorporating by reference any information posted on
www.shell.com.
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. US 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 31, 2019
The information in this Report 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 Coulter, Company Secretary- Investor Relations:
International + 31 (0) 70 377 4540; North America +1 832 337 2034-
Media: International +44 (0) 207 934 5550; USA +1 832 337 4355
LEI number of Royal Dutch Shell plc:
21380068P1DRHMJ8KU70Classification: Inside Information