First quarter 2015 results - April 30, 2015
On Thursday, April 30, 2015 Royal Dutch Shell plc released its first quarter results and first quarter interim dividend announcement for 2015. On this page a summarised overview of the results and links to the full set of results documents and webcast.
CFO video comment
First quarter 2015 results CFO video comment
Hello, I am Simon Henry, the Chief Financial Officer of Royal Dutch Shell.
Today we announced our quarterly financial results. Let me give you the highlights.
Our first quarter 2015 earnings were $3.2 billion on a clean Current Cost of Supplies basis and earnings per share decreased by 56% from first quarter 2014.
Our cash flow generated from operations was around $7 billion. On a Q1 to Q1 basis we saw a significant decline in Upstream earnings and higher earnings in Downstream.
Earlier this month, we announced a recommended offer to acquire BG. This is an important transaction for Shell.
The combination with BG will accelerate our financial growth strategy, particularly in deep water and liquefied natural gas, and both of these are growth priorities for Shell and areas where the company is already one of the industry leaders.
This is an exciting next step for both companies. And we are looking forward to updating on that when the transaction has closed, which we expect in early 2016.
Returning to our first quarter results.
Upstream underlying earnings were nearly $700 million, a decrease of some $5 billion from year ago levels.
This was a large move and includes a $4.7 billion reduction for the lower oil and gas prices.
Downstream earnings were $2.6 billion, that is 68% higher than year-ago levels, benefiting from stronger refining margin environment and operational performance.
We set out a programme to moderate our investment spending in 2014, with a reduction in both headline and organic spending, and we continue with that approach in 2015.
We now expect spending this year at around $33 billion or less, in other words a $2 billion reduction from the $35 billion ceiling on spending that we set out at the start of the year.
This is a dynamic picture, and has included a series of pragmatic decisions on new opportunities.
It was good to see progress on operating costs, excluding identified items, in the first quarter results, as these fell by almost $1.1 billion, or 10%, on a Q1 to Q1 basis, this was 2/3 exchange rate and 1/3 self-help there is more to come here.
Asset sales in the quarter totaled over $2 billion so far this year.
Dividends are our main route for returning cash to shareholders.
Dividends are confirmed at $0.47 cent per share for the quarter and $1.88 per share for 2015.
Returns to shareholders dividend declared plus buybacks were $14.4 billion over the last 12 months.
All of this underlines our commitment to shareholder returns.
Thank you for listening.
- Royal Dutch Shell’s first quarter 2015 earnings, on a current cost of supplies (CCS) basis (see Note 2), were $4.8 billion compared with $4.5 billion for the first quarter 2014.
- First quarter 2015 CCS earnings excluding identified items (see page 4) were $3.2 billion compared with $7.3 billion for the first quarter 2014, a decrease of 56%.
- Compared with the first quarter 2014, CCS earnings excluding identified items benefited from improved Downstream results reflecting steps taken by the company to improve financial performance, higher realised refining margins, lower costs, and increased trading contributions. In Upstream, earnings were impacted by the significant decline in oil and gas prices and lower trading contributions. Weaker exchange rates resulted in a hurt to deferred tax positions of some $700 million compared with the first quarter 2014, which were not included as identified items. This was partly offset by lower costs and new high-margin liquids production volumes from new deep-water projects and improved operational performance.
- Basic CCS earnings per share excluding identified items for the first quarter 2015 decreased by 56% versus the same quarter a year ago.
- Cash flow from operating activities for the first quarter 2015 was $7.1 billion. Excluding working capital movements, cash flow from operating activities for the first quarter 2015 was $7.5 billion.
- Cash dividends paid to Royal Dutch Shell plc shareholders in the first quarter 2015 were $2.9 billion. During the first quarter some 12.7 million shares were bought back for cancellation for a consideration of $0.4 billion.
- Gearing at the end of the first quarter 2015 was 12.4%.
- A first quarter 2015 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share (“ADS”).
“Our results reflect the strength of our integrated business activities, against a backdrop of lower oil prices. Meanwhile, in what is clearly a difficult industry environment, we continue to take steps to further improve competitive performance by redoubling our efforts to drive a sharper focus on the bottom line in Shell.
Part of this sharper focus is the sale of non-strategic assets. Asset sales total over $2 billion so far this year, as we successfully reduced our onshore footprint in Nigeria.
In parallel we continue to reduce our operating costs and capital spending; and by deferring and reshaping new projects, we can achieve further efficiencies and savings in the global supply chain.
Looking ahead, the proposed combination with BG, which we announced in April, would create a stronger company for both sets of shareholders.
The combination with BG would accelerate Shell's growth strategy in deep water and LNG, and create a springboard for further optimisation of our asset base, particularly when evaluating the longer-term portfolio.”
Simon Henry, Chief Financial Officer of Royal Dutch Shell plc, host live audio webcasts of the first quarter 2015 results on Thursday April 30, 2015 at 13:30 BST (14:30 CEST / 08:30 EDT).