CEO video comment

Fourth quarter 2017 summary of unaudited results

Summary of unaudited results

$ million

Q4 2017 Q3 2017 Q4 2016 1 Definition Full year
2017
Full year
2016
%
3,807 4,087 1,541 +147 Income/(loss) attributable to shareholders 12,977 4,575 +184
3,082 3,698 1,032 +199 CCS earnings attributable to shareholders Note 2 12,081 3,533 +242
(1,221) (405) (763) Of which: Identified items2 A (3,683) (3,652)
4,303 4,103 1,795 +140 CCS earnings attributable to shareholders excluding identified items 15,764 7,185 +119
94 105 40 Add: CCS earnings attributable to non-controlling interest 418 270
4,397 4,208 1,835 +140 CCS earnings excluding identified items 16,182 7,455 +117
Of which:
1,636 1,282 907 Integrated Gas 5,268 3,700
1,650 562 54 Upstream 3,091 (2,704)
1,396 2,668 1,339 Downstream 9,082 7,243
(285) (304) (465) Corporate (1,259) (784)
7,275 7,582 9,170 -21 Cash flow from operating activities 35,650 20,615 +73
(665) (3,912) (3,429) Cash flow from investing activities (8,029) (30,963)
6,610 3,670 5,741 Free cash flow H 27,621 (10,348)
0.46 0.50 0.19 +142 Basic earnings per share ($) 1.58 0.58 +172
0.37 0.45 0.13 +185 Basic CCS earnings per share ($) B 1.47 0.45 +227
0.52 0.50 0.22 +136 Basic CCS earnings per share excl. identified items ($) 1.92 0.92 +109
0.47 0.47 0.47 - Dividend per share ($) 1.88 1.88 -

1  Q4 on Q4 change
2 Fourth quarter 2017 includes a non-cash charge of $2,014 million related to the impact of the US tax reform legislation.

CCS earnings attributable to shareholders excluding identified items were $4.3 billion for the fourth quarter 2017 and $15.8 billion for the full year 2017, reflecting increased contributions from all businesses, compared with 2016. Full year earnings benefited mainly from higher realised oil, gas and LNG prices, improved refining performance and higher production from new fields, which offset the impact of field declines and divestments.

Cash flow from operating activities for the fourth quarter 2017 of $7.3 billion included negative working capital movements of $1.1 billion. Excluding working capital effects, cash flow from operations was $8.4 billion. Full year 2017 cash flow from operating activities of $35.7 billion included negative working capital movements of $3.2 billion. 

Total dividends distributed to shareholders in the quarter were $3.9 billion, of which $1.6 billion were settled by issuing 52.7 million A shares under the Scrip Dividend Programme. In November, Shell announced the cancellation of the Scrip Dividend Programme from the fourth quarter 2017. Shell expects to announce a dividend of $0.47 per ordinary share and $0.94 per American Depositary Share for the first quarter 2018.

Additional performance measures

$ million

Q4 2017 Q3 2017 Q4 2016 1 Definition Full year
2017
Full year
2016
%
6,778 5,742 6,913 Capital investment 2 C 24,006 79,877
6,474 1,365 3,278 Divestments D 17,340 4,984
3,756 3,657 3,905 -4 Total production available for sale (thousand boe/d) 3,664 3,668 -
55.28 47.06 44.54 +24 Global liquids realised price ($/b) 49.00 38.64 +27
4.40 4.15 4.03 +9 Global natural gas realised price ($/thousand scf) 4.27 3.65 +17
9,776 9,477 9,895 -1 Operating expenses G 38,083 41,549 -8
9,839 9,197 9,844 - Underlying operating expenses G 37,556 38,342 -2
5.8% 5.0% 3.0% ROACE (reported income basis) E 5.8% 3.0%
5.6% 4.6% 2.9% ROACE (CCS basis excluding identified items) E 5.6% 2.9%
24.8% 25.4% 28.0% Gearing F 24.8% 28.0%

1  Q4 on Q4 change

2 Full year 2016 included $52,904 million related to the acquisition of BG Group plc.

A, B, C, D, E, F, G, H and Note 2 - refer to the full quarterly results announcement for definitions.

Fourth quarter 2017 results financial documents

Ben van Beurden

CEO statement

Royal Dutch Shell Chief Executive Officer Ben van Beurden commented:

“2017 was a year of strong financial performance for Shell. A year of transformation, in which we showed we have what it takes to deliver a world-class investment case. Our relentless focus on value, performance and competitiveness meant we were able to deliver $39 billion of cash flow from operations excluding working capital movements from our upgraded portfolio. We strengthened our financial framework during the year through an $8 billion reduction in our net debt, while our increased free cash flow generation gave us the confidence to cancel the scrip dividend programme in the fourth quarter, in line with what we said previously. 

We reported strong earnings for the quarter underpinned by continued delivery momentum. Cash flow reflected higher tax payments and increased cash requirements in relation to our trading business. We enter 2018 with continued discipline and confidence, committed to the delivery of strong returns and cash.” 

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