Fourth quarter 2014 results - January 29, 2015
On Thursday, January 29, 2015 Royal Dutch Shell plc releases its fourth quarter and full year results and fourth quarter interim dividend announcement for 2014. On this page a summarised overview of the results and links to the full set of results documents and webcast.
CEO video comment
Title: Fourth Quarter 2014 Results
Duration: 2:51 minutes
Ben van Beurden CEO of Shell comments on the Q4 2014 results
Fourth Quarter 2014 Results
Balancing Growth & Returns
29th January 2015
Royal Dutch Shell plc
[Background still image]
Shell worker in a harness climbing some stairs in working environment.
Ben van Beurden’s head and shoulders.
Ben van Beurden
CEO Royal Dutch Shell
[Ben van Beurden]
Hello, I am Ben van Beurden, the CEO of Royal Dutch Shell.
Today we updated on our financial results and the priorities for 2015. Let me give you the highlights.
We set out an agenda in 2014 to balance growth and returns in Shell and our results in 2014 show that this strategy is impactful where it matters: at the bottom line.
Still of oil rig, right-hand third of the screen is then split off vertically to show two industry images one after the other.
Strong project delivery
[Ben van Beurden]
By successfully delivering against our three key priorities of better financial performance, enhanced capital efficiency and continued strong project delivery, we are improving Shell's competitive position in the oil & gas industry.
Still of three Shell employees wearing red boiler suits and hard hats, working together on pipes. Middle of the screen is then replaced by a still image of an oil refinery at night. Right-hand side of screen replaced by still image of close-up night time shot of oil refinery, left-hand side of screen replaced by still image of night time close-up of another section of the refinery. Head and shoulders of Ben van Beurden.
Full year 2014 CCS earnings
[Ben van Beurden]
On our 2014 results.
Full year 2014 earnings on a current cost of supplies basis and excluding identified items were $22 billion.
We reported higher full year earnings for both Upstream and Downstream.
Cash flow from operations was $45 billion for the year and we delivered $25 billion of free cash flow, which underpinned $15 billion of dividends and share buybacks.
So our strategy is delivering, but we are not complacent. Weaker oil prices underline that there is more to do here.
The three themes of financial performance, capital efficiency and project delivery will remain as Shell's priorities in 2015.
Cash flow from operations: $45 billion
$15 billion of dividends and share buybacks
Financial performance, capital efficiency & project delivery
Shell priorities 2015
Screen divided into still shots of old refinery/Shell petrol station.
North America resources plays
New restructuring programmes
[Ben van Beurden]
In 2015 this will include a continued drive to improve performance in Oil Products and North America resources plays with new restructuring programmes in Upstream engines and International resources plays.
Still image of rainbow over oil and gas works. Screen then split horizontally and top half replaced by shot of oil rig. Head and shoulders of Ben van Beurden.
[Ben van Beurden]
Today's lower oil prices create multi-billion dollar opportunities to reduce our own costs and take out costs of the supply chain.
We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices.
We plan to cap our organic 2015 spending at 2014 levels, retain flexibility for both opportunistic, incremental plays, and to further reduce spending should market conditions warrant that step.
The agenda we set in 2014 to balance growth and returns positioned us well for the current oil market downturn.
However, lower oil prices and the impact of our 2014 divestments will likely reduce this year's cash flow.
Shell is taking the tough decisions here to balance growth and returns.
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Thank you for visiting our site. Please understand that an investment in Royal Dutch Shell plc securities carries with it the risk that you could sustain losses as a result of your investment. Therefore, as investment in Royal Dutch Shell plc securities may not be appropriate for all investors. Accordingly, before investing in our securities we urge you to read our Annual Report and Form 20-F and consider the risks discussed within. You can find our Annual Report and Form 20-F on the link next to this presentation.
Again, thank you for your interest in Royal Dutch Shell plc.
Shell logo in top right-hand corner
Definitions & cautionary note
Copyright, Shell International Limited 2015
[Accompanying Shell logo music]
- Royal Dutch Shell’s fourth quarter 2014 earnings, on a current cost of supplies (CCS) basis (see Note 2), were $4.2 billion compared with $2.2 billion for the same quarter a year ago. Full year 2014 CCS earnings were $19.0 billion compared with $16.7 billion in 2013.
- Fourth quarter 2014 CCS earnings excluding identified items (see page 6) were $3.3 billion compared with $2.9 billion for the fourth quarter 2013, an increase of 12%. Full year 2014 CCS earnings excluding identified items were $22.6 billion compared with $19.5 billion in 2013.
- Compared with the fourth quarter 2013, CCS earnings excluding identified items benefited from improved Downstream results reflecting steps taken by the company to improve financial performance and the industry environment. In Upstream, earnings benefited from increased high-margin liquids production volumes and improved operational performance, and lower well write-offs. These items were more than offset by lower oil prices. Upstream earnings excluding identified items were impacted by $330 million related to an increase of a deferred tax liability as a result of the weakening Australian dollar.
- Fourth quarter 2014 basic CCS earnings per share excluding identified items increased by 13% versus the fourth quarter 2013. Full year 2014 basic CCS earnings per share excluding identified items increased by 15% versus 2013.
- Total cash dividends paid to shareholders in the fourth quarter 2014 were $3.0 billion. During the fourth quarter some 27.4 million shares were bought back for cancellation for a consideration of $1.0 billion.
- Gearing at the end of 2014 was 12.2% compared with 16.1% at the end of 2013.
- A fourth quarter 2014 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share (“ADS”), an increase of 4% compared with the fourth quarter 2013.
- Royal Dutch Shell is expected to announce a dividend of $0.47 per ordinary share and $0.94 per American Depositary Share (“ADS”) in respect of the first quarter 2015.
Ben van Beurden, Chief Executive Officer of Royal Dutch Shell plc hosted live video webcasts of the fourth quarter 2014 and full year results on Thursday January 29, 2015.