First quarter 2020 results – April 30, 2020
Apr 30, 2020
On Thursday April 30, 2020 at 07:00 BST (08:00 CEST and 02:00 EDT) Royal Dutch Shell plc released its first quarter results and first interim dividend announcement for 2020.
On this page a summarised overview of the Royal Dutch Shell plc first quarter 2020 results and links to the full set of results documents and webcast.
CEO & CFO video comment
Title: Q1 Results April 2020
Duration 02:45
Description:
A video led by Ben van Beurden with Jessica Uhl delivering the figures to summarize the Q1 April 2020 Results
Accessibility Script
[Audio]
Theme music begins
[Vision]
Ben van Beurden stands in front of a bookcase at home
[Ben to Camera]
The world has fundamentally changed over the last few months.
[Animation footage]
Ben van Beurden Shell CEO
[Ben to Camera]
As we record this message from home, COVID-19 continues to seriously affect people’s health and the global economy.
At Shell, we are focused on helping colleagues, communities and customers stay safe and well.
The global economic decline and uncertain outlook may have a significant impact on our profitability, cashflow and our balance sheet.
And we are working hard to ensure the resilience of our business.
We are focusing on safe and reliable operations each day.
[Animation footage]
Resilience of our business
Safe and reliable operations
[Ben to Camera]
And we are taking decisive action to reduce our spending, increase our liquidity and effectively position our business to manage through the deteriorating macro-economic and commodity price outlook.
[Animation footage]
Reduce our spending
Increase our liquidity
Manage macro-economic outlook
[Ben to Camera]
After extensive valuation of this outlook we have taken the decision to rebase our quarterly dividend, starting this quarter.
This prudent step will reinforce our resilience, it will preserve the strength of our balance sheet and support value creation in the long term.
[Animation footage]
Reinforce our resilience
Preserve our balance sheet strength
Support value creation
[Jessica to Camera]
We remain committed to our financial framework including substantial shareholder distributions.
[Animation footage]
Jessica Uhl Shell CFO
[Jessica to Camera]
Despite the impacts of the prevailing economic conditions, Shell has delivered good earnings in the first quarter of 2020.
Let’s look at some of the key numbers:
[Jessica Voice-over]
We delivered $2.9 billion of earnings on a current cost of supplies basis excluding identified items
[Animation footage]
SHELL RESULTS SUMMARY Q1 2020
$2.9 billion of earnings on a CCS basis excl. identified items
$2.8 billion earnings on a CCS basis
[Jessica Voice-over]
$7.4 billion of cash flow from operations excluding working capital movements.
[Animation footage]
SHELL RESULTS SUMMARY Q1 2020
$7.4 billion cash flow from operations excl. working capital movements
$14.9 billion cash flow from operations
[Jessica Voice-over]
$12.1 billion of free cash flow
[Animation footage]
SHELL RESULTS SUMMARY Q1 2020
$12.1 billion free cash flow
[Jessica to Camera]
All of this at an average oil price of $50 per barrel in this quarter.
[Jessica Voice-over]
Return on average capital employed was 6.1%.
[Animation footage]
SHELL RESULTS SUMMARY Q1 2020
6.1% ROACE
[Jessica Voice-over]
And gearing is now 28.9%
[Animation footage]
SHELL RESULTS SUMMARY Q1 2020
28.9% GEARING
[Ben to Camera]
These are difficult and extraordinary times, but we must maintain focus on the long term.
Just this month, we announced a bold climate-ambition: to be a net-zero emissions energy business by 2050, or sooner. Society expects nothing less.
[Animation footage]
Net-zero emissions energy business by 2050
[Ben to Camera]
For 2020, our priorities remain the same: a relentless focus on value, operational excellence and competitiveness.
[Animation footage]
Relentless focus on value
Operational excellence
Competitiveness
[Ben to Camera]
And as we look to the future, we will continue to protect and grow our business.
Please stay safe, stay healthy and take care for each other.
[Audio]
Theme music fades out
[Graphic]
Shell logo
#ShellResults
©Shell International Limited 2020
[Graphic]
Graphic appears reading: Thank you for visiting our site. Please understand that an
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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.
[Graphic]
A graphic appears titled Definitions and cautionary note, relevant to the video.
Summary of unaudited results
$ million
|
Q1 2020
|
Q4 2019
|
Q1 2019
|
%¹
|
|
Reference
|
|---|---|---|---|---|---|
|
(24)
|
965
|
6,001
|
-100
|
Income/(loss) attributable to shareholders
|
|
|
2,756
|
871
|
5,293
|
-48
|
CCS earnings attributable to shareholders
|
Note 2
|
|
(104)
|
(2,060)
|
(8)
|
|
Of which: Identified items
|
A
|
|
2,860
|
2,931
|
5,301
|
-46
|
CCS earnings attributable to shareholders excluding identified items
|
|
|
97
|
125
|
131
|
|
Add: CCS earnings attributable to non-controlling interest
|
|
|
2,957
|
3,056
|
5,432
|
-46
|
CCS earnings excluding identified items
|
|
|
|
|
|
|
Of which:
|
|
|
2,143
|
1,986
|
2,569
|
|
Integrated Gas
|
|
|
291
|
709
|
1,648
|
|
Upstream
|
|
|
1,363
|
1,501
|
1,448
|
|
Oil Products
|
|
|
148
|
(65)
|
451
|
|
Chemicals
|
|
|
(989)
|
(1,075)
|
(684)
|
|
Corporate
|
|
|
14,851
|
10,267
|
8,630
|
+72
|
Cash flow from operating activities
|
|
|
(2,718)
|
(4,862)
|
(4,622)
|
|
Cash flow from investing activities
|
|
|
12,133
|
5,405
|
4,008
|
|
Free cash flow
|
G
|
|
0.00
|
0.12
|
0.74
|
-100
|
Basic earnings per share ($)
|
|
|
0.35
|
0.11
|
0.65
|
-46
|
Basic CCS earnings per share ($)
|
B
|
|
0.37
|
0.37
|
0.65
|
-43
|
Basic CCS earnings per share excl. identified items ($)
|
|
|
0.16
|
0.47
|
0.47
|
-66
|
Dividend per share ($)
|
|
1 Q1 on Q1 change.
CCS earnings attributable to shareholders excluding identified items were $2.9 billion, reflecting lower realised oil, gas and LNG prices, weaker realised refining and chemicals margins as well as lower sales volumes, compared with the first quarter 2019. This was partly offset by favourable movements in deferred tax positions and lower operating expenses.
Cash flow from operating activities excluding working capital movements was $7.4 billion, reflecting lower earnings and higher cost-of-sales adjustment, partly offset by higher cash inflows related to commodity derivatives and lower tax payments, compared with the first quarter 2019.
Total dividends distributed to shareholders in the quarter were $3.5 billion. During the quarter, Shell completed another tranche of the share buyback programme. Since the launch of the programme, Shell has bought back almost $16 billion in shares for cancellation.
Additional performance measures
$ million
|
Q1 2020
|
Q4 2019
|
Q1 2019
|
%¹
|
|
Reference
|
|---|---|---|---|---|---|
|
4,970
|
6,883
|
5,601
|
|
Cash capital expenditure
|
C
|
|
3,719
|
3,763
|
3,752
|
-1
|
Total production available for sale (thousand boe/d)
|
|
|
46.53
|
56.60
|
57.42
|
-19
|
Global liquids realised price ($/b)
|
|
|
4.31
|
4.42
|
5.37
|
-20
|
Global natural gas realised price ($/thousand scf)
|
|
|
8,618
|
10,384
|
8,917
|
-3
|
Operating expenses
|
F
|
|
8,600
|
9,993
|
8,865
|
-3
|
Underlying operating expenses
|
F
|
|
4.6%
|
6.7%
|
9.2%
|
|
ROACE (Net income basis)
|
D
|
|
6.1%
|
6.9%
|
8.4%
|
|
ROACE (CCS basis excluding identified items)
|
D
|
|
28.9%
|
29.3%
|
26.5%
|
|
Gearing
|
E
|
1 Q1 on Q1 change.
Supplementary financial and operational disclosure for this quarter is available at www.shell.com/investor.
CEO statement
Royal Dutch Shell Chief Executive Officer Ben van Beurden commented:
"Under extremely challenging conditions, Shell is stepping up to protect our people and support communities around the globe while delivering strong safety and operational performance across our business. Our Integrated Gas and Marketing businesses continued to achieve robust results this quarter, bringing resilience to our cash flows. In March, we took decisive actions to reduce our spending, increase our liquidity and position our business to manage the deteriorating macroeconomic and commodity price outlook. Our integrated business model, the high quality of our assets and the resourcefulness of our people have allowed us to respond swiftly.
Given the continued deterioration in the macroeconomic outlook and the significant mid and long-term uncertainty, we are taking further prudent steps to bolster our resilience, underpin the strength of our balance sheet and support the long-term value creation of Shell. Starting this quarter, the Board has decided to reduce our quarterly dividend to 16 US cents per share."
Chair of the Board statement
Chair of the Board of Royal Dutch Shell Chad Holliday commented:
“Shareholder returns are a fundamental part of Shell’s financial framework. However, given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook, the Board believes that maintaining the current level of shareholder distributions is not prudent. Following the announcement not to continue with the next tranche of the share buyback programme, the Board has also decided to reduce the first quarter 2020 dividend and reset to 16 US cents per share.
As conditions allow, the Board will continue to evaluate our capital allocation priorities between ongoing investment in our business, maintaining a strong balance sheet and increasing returns to shareholders which remains our ambition."