CEO video comment

Second quarter 2019 summary of unaudited results

Summary of unaudited results

$ million

Q2 2019 (1)
Q1 2019 (1)
Q2 2018
% (2)
Reference
2019 (1)
2018
%
2,998
6,001
6,024
-50
Income/(loss) attributable to shareholders
8,999
11,923
-25
3,025
5,293
5,226
-42
CCS earnings attributable to shareholders
Note 2
8,318
10,929
-24
(437)
(8)
535
Of which: Identified items
A
(445)
837
3,462
5,301
4,691
-26
CCS earnings attributable to shareholders excluding identified items
8,763
10,092
-13
130
131
121
Add: CCS earnings attributable to non-controlling interest
260
242
3,592
5,432
4,812
-25
CCS earnings excluding identified items
9,024
10,334
-13
Of which:
1,726
2,569
2,305
Integrated Gas
4,294
4,744
1,335
1,725
1,457
Upstream
3,060
3,008
1,338
1,822
1,660
Downstream
3,160
3,426
(806)
(684)
(610)
Corporate
(1,490)
(844)
11,031
8,630
9,500
+16
Cash flow from operating activities
19,661
18,972
+4
(4,166)
(4,622)
29
Cash flow from investing activities
(8,788)
(4,265)
6,865
4,008
9,529
Free cash flow
H
10,873
14,707
0.37
0.74
0.72
-49
Basic earnings per share ($)
1.11
1.44
-23
0.37
0.65
0.63
-41
Basic CCS earnings per share ($)
B
1.02
1.32
-23
0.43
0.65
0.56
-23
Basic CCS earnings per share excl. identified items ($)
1.08
1.21
-11
0.47
0.47
0.47
-
Dividend per share ($)
0.94
0.94
-

(1)  IFRS 16 Leases (IFRS 16) was adopted with effect from January 1, 2019. See Note 8 “Adoption of IFRS 16 Leases”.

(2) Q2 on Q2 change.

Please refer to the full quarterly results announcement for Notes 1 through 8 and Alternative performance measures A through I.

Compared with the second quarter 2018, CCS earnings attributable to shareholders excluding identified items were $3.5 billion, reflecting lower realised oil, gas and LNG prices, weaker realised chemicals and refining margins as well as higher provisions, partly offset by improved production. Earnings also included a negative impact of $63 million related to the implementation of IFRS 16.

Cash flow from operating activities for the second quarter 2019 was $11.0 billion and included positive working capital movements of $0.6 billion. Compared with the second quarter 2018, cash flow from operating activities excluding working capital movements mainly reflected lower earnings, partly offset by reduced cash margining outflows on commodity derivatives. This also included a positive impact of $1.0 billion related to the implementation of IFRS 16.

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 October 28, 2019. In aggregate, since the launch of the share buyback programme, almost 294 million A ordinary shares have been bought back for cancellation for a consideration of $9.25 billion.

Additional performance measures

$ million

Q2 2019
Q1 2019
Q2 2018
% (1)
Reference
2019
2018
%
5,337
5,601
5,518
Cash capital expenditure (2)
C
10,938
10,746
6,341
6,685
5,750
Capital investment (3)
C
13,026
11,282
3,583
3,752
3,442
+4
Total production available for sale (thousand boe/d)
3,667
3,639
+1
61.26
57.42
66.24
-8
Global liquids realised price ($/b)
59.26
63.49
-7
4.21
5.37
4.86
-13
Global natural gas realised price ($/thousand scf)
4.83
4.91
-2
9,941
8,917
10,006
-1
Operating expenses
G
18,859
19,725
-4
9,477
8,865
9,844
-4
Underlying operating expenses
G
18,343
19,630
-7
8.4%
9.2%
8.1%
ROACE (Net income basis)
E
8.4%
8.1%
8.2%
8.4%
7.6%
ROACE (CCS basis excluding identified items) (4)
E
8.2%
7.6%
27.6%
26.5%
23.6%
Gearing
F
27.6%
23.6%

(1) Q2 on Q2 change.

(2) With effect from 2019, Cash capital expenditure has been introduced as a capital spent performance measure (see Reference C).

(3) With effect from 2019, the definition has been amended (see Reference C). Comparative information has been revised.

(4) With effect from 2019, the definition has been amended (see Reference E). Comparative information has been revised.

Please refer to the full quarterly results announcement for Notes 1 through 8 and Alternative performance measures A through I.

 

Supplementary financial and operational disclosure for this quarter is available at www.shell.com/investor.

As a result of the implementation of IFRS 16, net debt increased by $16,103 million. Second quarter 2019 reported Gearing was 27.6% on an IFRS 16 basis, comparable with 23.0% on an IAS 17 basis. Gearing included an additional negative impact of 0.4%, arising from IFRS 11 accounting interpretations (see Note 1).

Second quarter 2019 results financial documents

Ben van Beurden

CEO statement

Royal Dutch Shell Chief Executive Officer Ben van Beurden commented:

“We have delivered good cash flow performance, despite earnings volatility, in a quarter that has seen challenging macroeconomic conditions in refining and chemicals as well as lower gas prices. This quarter we achieved some key milestones, such as the start-up of Appomattox and the first LNG cargo from Prelude. These add to our competitive portfolio, which is expected to generate additional cash in the coming quarters.

The resilience of our Upstream and customer-facing businesses and their ability to generate cash support the delivery of our 2020 outlook, which remains unchanged.” 

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