CFO video comment

Third quarter 2015 summary of unaudited results

  • Royal Dutch Shell’s third quarter 2015 earnings, on a current cost of supplies (CCS) basis (see Note 2), were a loss of $6.1 billion compared with a gain of $5.3 billion for the same quarter a year ago.
  • Third quarter 2015 CCS earnings included identified items of $7.9 billion.
  • Third quarter 2015 CCS earnings excluding identified items (see page 5) were $1.8 billion compared with $5.8 billion for the third quarter of 2014, a decrease of 70%. Earnings were impacted by non-cash charges of some $1.0 billion related to adverse currency exchange rate effects on deferred tax positions and financing items which were not included as identified items.
  • Compared with the third quarter 2014, CCS earnings excluding identified items included improved Downstream and lower Upstream results. In Downstream, earnings benefited from steps taken by Shell to improve financial performance and from higher realised refining margins. Upstream earnings were negatively impacted by lower oil and gas prices, partly offset by lower costs, increased production volumes and improved operational performance.
  • Basic CCS earnings per share excluding identified items decreased by 70% versus the third quarter 2014.
  • Cash flow from operating activities for the third quarter 2015 was $11.2 billion, compared with $12.8 billion for the same quarter last year. Excluding working capital movements, cash flow from operating activities for the third quarter 2015 was $5.3 billion, compared with $11.1 billion for the third quarter 2014.
  • Total dividends distributed to Royal Dutch Shell plc shareholders in the quarter were $3.0 billion, of which $0.7 billion were settled under the Scrip Dividend Programme. No shares were bought back during the third quarter.
  • Gearing at the end of the third quarter 2015 was 12.7%.
  • A third quarter 2015 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share (“ADS”).

Third quarter 2015 results financial documents

Ben van Beurden

CEO statement

“Shell’s integrated business and our performance drive are helping to mitigate the impact of low oil prices on the bottom line, in what is a difficult environment for the industry today.

We continue to improve the operational performance of our assets, and production volumes are up. Costs are falling across the company and Shell’s performance drive is delivering at the bottom line.

Our financial framework is highly competitive, with balance sheet gearing at 12.7%, similar to year ago levels, despite a halving of oil prices. Both net investments and dividends have been covered by operating cash flow over the last year, when oil prices have averaged $60 per barrel.

While our cash flow and our operating performance in the quarter were strong, the headline numbers we’re reporting today include substantial charges. These charges reflect both a lower oil and gas price outlook and the firm steps we are taking to review and reduce Shell’s longer-term option set.

We have halted exploration activities offshore Alaska, and stopped the construction of the Carmon Creek in-situ oil project in Canada.

These are difficult, but impactful decisions. I am determined that Shell will become a more focused and competitive company as a result.

The BG deal, which remains on track for completion in early 2016, is a springboard to focus Shell into fewer and more profitable themes, especially deep water and integrated gas.”

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