Second quarter 2013 summary of unaudited results

  • Royal Dutch Shell’s second quarter 2013 earnings, on a current cost of supplies (CCS) basis (see Note 1), were $2.4 billion compared with $6.0 billion in the same quarter a year ago. Second quarter 2013 earnings included an identified net charge of $2.2 billion after tax, mainly reflecting impairments (see page 6).
  • Second quarter 2013 CCS earnings excluding identified items (see page 6), were $4.6 billion and included a combined negative impact of $0.7 billion after tax related to the impact of the weakening Australian dollar on a deferred tax liability and the impact of the deteriorating operating environment in Nigeria. Compared to the second quarter 2012, CCS earnings excluding identified items were also impacted by higher operating expenses and depreciation as well as increased exploration well write-offs. Second quarter 2012 CCS earnings excluding identified items were $5.7 billion.
  • Basic CCS earnings per share excluding identified items decreased by 21% versus the same quarter a year ago.
  • Cash flow from operating activities for the second quarter 2013 was $12.4 billion, compared with $13.3 billion in the same quarter last year. Excluding working capital movements, cash flow from operating activities for the second quarter 2013 was $8.4 billion, compared with $9.5 billion in the second quarter 2012.
  • Capital investment for the second quarter 2013 was $11.3 billion. Net capital investment (see Note 1) for the quarter was $10.9 billion.
  • Total dividends distributed in the quarter were $2.8 billion, of which some $0.8 billion were settled under the Scrip Dividend Programme. During the second quarter some 56.2 million shares were bought back for cancellation for a consideration of $1.9 billion.
  • Gearing at the end of the second quarter 2013 was 10.3% (see Note 2).
  • A second quarter 2013 dividend has been announced of $0.45 per ordinary share and $0.90 per American Depositary Share (“ADS”), an increase of 5% compared with the second quarter 2012.

Second quarter 2013 results dividend announcement

Second quarter 2013 interim dividend announcement

Ben van Beurden

Second quarter 2013 results CEO statement

“Our cash flow pays for Shell's dividends and investment in new projects to ensure affordable and reliable energy supplies for our customers, and to add value for our shareholders.”

Shell’s underlying CCS earnings were $4.6 billion for the quarter, a 21% decrease in CCS earnings per share from the second quarter of 2012.

“Higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria have hit our bottom line. These results were undermined by a number of factors – but they were clearly disappointing for Shell“, continued Voser.

Oil theft and disruptions to gas supplies in Nigeria are causing widespread environmental damage, and could cost the Nigerian government $12 billion in lost revenues per year. “We will play our part, but these are problems Shell cannot solve alone,” Voser said.

“We’ve made substantial improvements to our portfolio in the last few years. Today, Shell is rich with new investment opportunities and is capital constrained – the opposite position to where the company was in the middle of the last decade.”

“Shell is investing in new capacity worldwide, to generate profitable growth for shareholders. In the next 18 months we expect to see five major project start-ups, which should add over $4 billion to our 2015 cash flow(1).

We’ve embedded rigorous portfolio management into Shell, to improve our capital efficiency and refresh the portfolio for growth. We have completed some $21 billion of divestments in the last three years and some $4 billion in the last 12 months alone, with more to come.

Shell is entering a new phase of more substantial portfolio change, which will lead to a higher rate of divestments in the coming years.

We have recently launched strategic portfolio reviews in both Nigeria onshore and North America resources plays, which will lead to further focus and divestments there, as we continue to shape the company for the future.

Our strategy is to deliver sustainable growth in cash generation through the business cycle, underpinning Shell’s competitive dividends and returns. We are not targeting oil and gas production volumes; rather we are focusing on financial performance.”

Voser concluded, “Shell’s sustained investment in new growth projects will drive our financial performance. Dividends are Shell’s main route for returning cash to shareholders and we have distributed more than $11 billion of dividends in the last 12 months. So far this year, we have repurchased more than $3 billion of shares, and we are on track for $4-5 billion of share buy-backs in 2013. This underlines our commitment to shareholder returns.”

(1) Projects comprised of Mars B and Cardamom in deep-water Gulf of Mexico, Gumusut-Kakap in deep-water Malaysia, Kashagan Phase 1 in Kazakhstan and the completion of the acquisition of part of Repsol S.A.’s LNG portfolio. Cash flow from operations addition outlook assumes that the Brent oil price is $100 per barrel.

Second quarter 2013 results CEO video comment

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Second quarter 2013 results webcasts & presentations

Peter Voser, Chief Executive Officer and Simon Henry, Chief Financial Officer of Royal Dutch Shell will host an audio webcast of the second quarter results on Thursday August 1 2013, 13:30 BST (14:30 CEST / 08:30 EDT).

PDF of media webcast presentation slides

PDF of media webcast presentation transcript

PDF of analyst webcast presentation slides

PDF of analyst webcast presentation transcript