Second quarter 2017 results – July 27, 2017
Jul 27, 2017
On Thursday, July 27, 2017 at 07.00 BST (08.00 CEST and 02.00 EDT) Royal Dutch Shell plc released its second quarter results and second quarter interim dividend announcement for 2017.
On this page a summarised overview of the Royal Dutch Shell plc second quarter 2017 results and links to the full set of results documents and webcast.
Ben van Beurden, CEO of Shell, comments on the Q2 2017 results
Video transcript: 'Ben van Beurden, CEO of Shell, comments on the Q2 2017 results'
Title: Second Quarter 2017 results
Duration 03:21
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Shell Logo
Second quarter 2017 results
Re-shaping Shell, to create a world-class investment case
Royal Dutch Shell Plc
July 27, 2017
#makethefuture
[Video Footage]
Ben Van Beurden piece to camera.
Caption: Ben van Beurden CEO Royal Dutch Shell
“Hello, I am Ben Van Beurden, the Chief Executive Officer of Royal Dutch Shell. Today, we announced our second quarter 2017 financial results. Let me update you on these.”
Ben Van Beurden voice over: “In the second quarter 2017, Shell generated strong earnings of $3.6 billion, excluding identified items, on a Current Cost of Supplies basis. Cash flow from operations was around $11.3 billion, with free cash flow, including divestment proceeds and investments, of $12.2 billion.
With this quarter…”
[Vision]
Still of oil tanker docked in the sea, illuminated at night.
Animated caption: 2nd quarter 2017 ccs earnings $3.6 billion excluding identified items, cashflow from operations around $11.3 billion
An animated white line appears creating a grid with 3 small stills on the right of the screen. The stills depict a petrol station with the Shell V-Power branding, pipelines and another large oil tanker illuminated at night. The stills slide off to the right and a still of a Shell V-Power petrol station with a red car filling up fades into vision.
[Vision]
Ben Van Beurden piece to camera.
“we now have a solid track record over a 12-month period, with $38 billion of cash flow from operations, at an average oil price of less than $50 a barrel. We have more than covered the cash dividend for the fourth consecutive quarter,
we have reduced net debt by almost $9 billion, and reduced gearing to 25.3%, from 28% a year ago, all while delivering a capital spending programme this year of $25 billion, which is affordable and allows for the growth underpinning our 2020 outlook for free cash flow.”
Ben Van Beurden voice over: “Returning to our second quarter results.
Our Integrated Gas earnings, excluding identified items, at $1.2 billion were some 35% higher than in the second quarter of 2016.”
[Vision]
Camera slowly zooms out on a still of a Shell processing plant rigged in the ocean.
Animated caption: Integrated gas earnings 35% higher than q2 2016 excluding identified items
[Vision]
Ben Van Beurden piece to camera.
“These results benefited from higher realised prices, higher LNG liquefaction volumes, and lower costs. This more than offset the impacts of lower gas and liquids production volumes, and lower contributions from trading.”
Ben Van Beurden voice over: “With higher realised oil and gas prices, lower depreciation and increased production, Upstream earnings excluding identified items were around $340 million, an increase of almost $1.7 billion from year-ago levels. Downstream earnings, excluding identified items and on a CCS basis, were $2.5 billion, 39% higher than year-ago levels, and that was driven mainly by Chemicals…”
[Vision]
Montage of stills.
Camera zooms slowly into a black and white still of an oil rig in the middle of the ocean.
Animated caption: Upstream earnings around $340 million excluding identified items
An animated white line appears creating a grid with 2 stills on the right of the screen. The stills depict an aerial shot of an oil rig in the middle of the ocean with a boat beside it and an oil rig at sunset. The stills slide off to the right as a still of the illuminated towers of a Shell processing plant fade into view.
Animated caption: Downstream ccs earnings $2.5 billion excluding identified items
[Vision]
Ben Van Beurden piece to camera.
“which was up 152%, and refining and trading, up 66% from year-ago levels. Now, these results benefited from stronger industry conditions in chemicals and in refining, improved operational performance, but also lower operating expenses.”
Ben Van Beurden voice over: “We received $6.7 billion in cash proceeds from divestments in Q2 2017 and have now completed $15 billion of divestments, with a further $6 billion announced. We have reached more than $20 billion of the $30 billion goal for divestments that we have set. In the current macro-economic environment…”
[Vision]
Montage of stills.
3 Stills fade into vision one by one across the Screen. The first depicting processing equipment, the second a Shell logo illuminated atop a petrol station, the third a dump truck in the desert. These fade out to show the deck of a tanker at sea illuminated at twilight.
Animated caption: On track to complete our $30 billion divestment program
[Vision]
Ben Van Beurden piece to camera.
“we continue to pull on four levers to strengthen our financial framework: divestments, capital investment, operating costs and the delivery of new projects. And, I'm confident that we are on track to deliver a world-class investment case to our shareholders. Thank you.”
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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, an 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.
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Shell logo
©Shell International Limited 2017
Compared with the second quarter 2016, CCS earnings attributable to shareholders excluding identified items of $3.6 billion reflected higher contributions from Downstream, driven by improved operational performance and stronger chemicals and refining industry conditions. Earnings also benefited from higher contributions from Upstream and Integrated Gas which benefited from higher realised prices and increased production from new fields, offsetting the impact of reduced volumes from Pearl GTL in Qatar.
Cash flow from operating activities for the second quarter 2017 of $11.3 billion included favourable working capital movements of $2.3 billion, compared with $2.3 billion in the second quarter 2016, which included negative working capital movements of $2.5 billion.
Total dividends distributed to shareholders in the quarter were $3.9 billion, of which $0.9 billion were settled by issuing 33.9 million A shares under the Scrip Dividend Programme.
A, B, C, D, E, F, G and H - refer to the full quarterly results announcement for definitions.
CEO statement
Royal Dutch Shell Chief Executive Officer Ben van Beurden commented: “Shell’s strong results this quarter show that we are reshaping the company following the integration of BG.
Cash generation has been resilient over four consecutive quarters, at an average oil price of just under $50 per barrel. This quarter, we generated robust earnings excluding identified items of $3.6 billion, while over the past 12 months cash flow from operations of $38 billion has covered our cash dividend and reduced gearing to 25%.
The external price environment and energy sector developments mean we will remain very disciplined, with an absolute focus on the four levers within our control, namely capital efficiency, costs, new project delivery, and divestments.
I am confident that we are on track to deliver a world-class investment to our shareholders.”