REG-Royal Dutch Shell: 4th Quarter and Full Year 2015 Unaudited Results <Origin Href="QuoteRef">RDSa.L</Origin> - Part 1
04/02/2016 07:10
ROYAL DUTCH SHELL PLC
4TH QUARTER AND FULL YEAR 2015 UNAUDITED RESULTS
* Royal Dutch Shell's fourth quarter 2015 earnings, on a current cost of
supplies (CCS) basis (see Note 2), were $1.8 billion compared with $4.2
billion for the same quarter a year ago. Full year 2015 CCS earnings were
$3.8 billion compared with $19.0 billion in 2014.
* Fourth quarter 2015 CCS earnings excluding identified items (see page 5)
were $1.8 billion compared with $3.3 billion for the fourth quarter of
2014, a decrease of 44%. Fourth quarter 2015 earnings were positively
impacted by non-cash net gains of some $0.3 billion related to currency
exchange rate effects on deferred tax positions. Full year 2015 CCS
earnings excluding identified items were $10.7 billion compared with $22.6
billion in 2014.
* Compared with the fourth quarter 2014, CCS earnings excluding identified
items benefited from continued strong Downstream results reflecting steps
taken by the company to improve financial performance. In Upstream,
earnings were impacted by the significant decline in oil and gas prices,
partly offset by lower costs. Contributions from integrated gas were higher
mainly as a result of improved trading performance and the effect of the
strengthening of the Australian dollar on deferred tax positions.
* Fourth quarter 2015 basic CCS earnings per share excluding identified items
decreased by 44% versus the fourth quarter 2014. Full year 2015 basic CCS
earnings per share excluding identified items decreased by 53% versus 2014.
* Total dividends distributed to Royal Dutch Shell plc shareholders in the
quarter were $3.0 billion, of which $1.2 billion were settled under the
Scrip Dividend Programme. No shares were bought back during the fourth
quarter.
* Gearing at the end of 2015 was 14.0% compared with 12.2% at the end of
2014.
* A fourth quarter 2015 dividend has been announced of $0.47 per ordinary
share and $0.94 per American Depositary Share ("ADS").
* Royal Dutch Shell is expected to announce a dividend of $0.47 per ordinary
share and $0.94 per ADS in respect of the first quarter 2016.
SUMMARY OF UNAUDITED RESULTS
Quarters $ million Full year
Q4 Q3 2015 Q4 %1 2015 2014 %
2015 2014
939 (7,416) 595 +58 Income/(loss) attributable to Royal 1,939 14,874 -87
Dutch Shell plc shareholders
901 1,296 3,568 Current cost of supplies (CCS) 1,903 4,167
adjustment for Downstream
1,840 (6,120) 4,163 -56 CCS earnings 3,842 19,041 -80
15 (7,890) 901 Identified items2 (6,834) (3,521)
1,825 1,770 3,262 -44 CCS earnings excluding identified 10,676 22,562 -53
items
Of which:
493 (425) 1,730 Upstream 1,780 16,505
1,524 2,617 1,550 Downstream 9,748 6,265
(192) (422) (18) Corporate and Non-controlling (852) (208)
interest
5,423 11,231 9,608 -44 Cash flow from operating activities 29,810 45,044 -34
0.29 (0.97) 0.66 -56 Basic CCS earnings per share ($) 0.61 3.02 -80
0.58 (1.94) 1.32 Basic CCS earnings per ADS ($) 1.22 6.04
0.29 0.28 0.52 -44 Basic CCS earnings per share excl. 1.69 3.57 -53
identified items ($)
0.58 0.56 1.04 Basic CCS earnings per ADS excl. 3.38 7.14
identified items ($)
0.47 0.47 0.47 - Dividend per share ($) 1.88 1.88 -
0.94 0.94 0.94 Dividend per ADS ($) 3.76 3.76
1 Q4 on Q4 change
2 See page 5
Royal Dutch Shell Chief Executive Officer Ben van Beurden commented:
"The completion of the BG transaction, which we are expecting in a matter of
weeks, marks the start of a new chapter in Shell, rejuvenating the company, and
improving shareholder returns.
We are making substantial changes in the company, reorganising our Upstream,
and reducing costs and capital investment, as we refocus Shell, and respond to
lower oil prices. As we have previously indicated, this will include a
reduction of some 10,000 staff and direct contractor positions in 2015-16
across both companies.
In 2015, we significantly curtailed spending by reducing the number of new
investment decisions and designing lower-cost development solutions. For 2016,
we have exited the Bab sour gas project in Abu Dhabi, and are postponing final
investment decisions on LNG Canada and Bonga South West in deep water Nigeria.
Operating costs and capital investment have been reduced by a total of $12.5
billion as compared to 2014, and we expect further reductions in 2016.
As a result of our actions in 2015, we have retained a strong balance sheet
position, with 14% gearing. Shell will take further impactful decisions to
manage through the oil price downturn, should conditions warrant that. Shell's
dividends for 2015 were $1.88 per share, and are expected to be at least $1.88
per share in 2016, as previously announced."
FOURTH QUARTER 2015 PORTFOLIO DEVELOPMENTS
Upstream
During the quarter in Canada, Shell announced the start of commercial
operations at the Quest carbon capture and storage project. Quest will capture
one-third of the emissions from Shell's Scotford Upgrader, which turns oil sand
bitumen into synthetic crude that can be refined into fuel and other products.
The carbon dioxide ("CO2") is then transported through a pipeline and injected
more than two kilometres underground below multiple layers of impermeable rock
formations. Quest is designed to capture and safely store more than one million
tonnes of CO2 each year.
In Ireland, Shell announced first production from the Corrib gas field (Shell
interest 45%). At peak annual production, the Corrib gas field is expected to
produce 45 thousand barrels of oil equivalent per day ("boe/d").
Shell started up the gas injection facilities at the Shell-operated
Gumusut-Kakap deep-water development (Shell interest 33%) in Malaysia. This
follows first oil production, achieved in the fourth quarter 2014.
In New Zealand, Shell agreed to sell its interest in the Maui natural gas
pipeline (Shell interest 83.75%) to First State Investments for a consideration
of NZD 335 million (around USD 200 million). The transaction, subject to
regulatory approval, is expected to complete in 2016.
In Nigeria, Shell Nigeria Exploration and Production Company Ltd announced
first production from the Bonga Phase 3 project (Shell interest 55%). Bonga
Phase 3 is an expansion of the Bonga Main development, with peak production
expected to be some 50 thousand boe/d. The oil will be transported through
existing pipelines to the Bonga floating production, storage and offloading
facility.
Also in Nigeria, Shell completed the sale of its 30% interest in Oil Mining
Lease ("OML") 71 and OML 72 to West African Exploration and Production Company
Limited, as part of its ongoing portfolio review and optimisation. Both of
these blocks were non-producing.
In Shell's exploration programme there was one successful non-operated oil
discovery with the Beryl K well (Shell interest 45%) in the United Kingdom.
Shell had continued success with near-field exploration discoveries in Brunei,
the Netherlands, and Oman.
In January, Shell announced that after careful and thorough evaluation of
technical challenges, it has decided to exit the joint development of the Bab
sour gas reservoirs (Shell interest 40%) with ADNOC in the emirate of Abu
Dhabi, United Arab Emirates, and to stop further joint work on the project. The
evaluation concluded that for Shell, the development of the project does not
fit with the company's strategy, particularly in the economic climate
prevailing in the energy industry.
Upstream divestment proceeds totalled some $0.3 billion for the fourth quarter
2015.
Downstream
During the quarter, Shell announced that it reached final investment decision
("FID") on a project to increase alpha olefins production at its chemical
manufacturing site in Geismar, Louisiana. Shell will construct a fourth alpha
olefins unit, adding 425 thousand tonnes of capacity. This project will make
the site the largest alpha olefins producer in the world.
Shell also announced FID on a project to build a major new unit at the Pernis
refinery in Rotterdam, the Netherlands. The solvent deasphalter unit will
remove heavier fractions from crude oil, allowing the refinery to upgrade a
larger proportion of its oil intake into lighter, high-grade products.
Construction work is planned to start in 2016, subject to permit approvals,
with completion expected by the end of 2018.
In the United Kingdom, Shell completed the sale of 185 service stations across
the United Kingdom to independent dealers. All 185 service stations will retain
the Shell brand and sell Shell's fuels.
In the United States, Shell completed the sale of an additional 3.7% interest
in Shell Midstream Partners, L.P. to public investors via the issuance of an
additional 9,200,000 LP units for net proceeds of $297 million.
Downstream divestment proceeds totalled some $1.1 billion for the fourth
quarter 2015 and included proceeds from the divestments of the Butagaz LPG
business in France, Shell's 75% interest in Tongyi Lubricants in China, the
retail, commercial fuels, and supply and distribution logistics businesses in
Norway.
KEY FEATURES OF THE FOURTH QUARTER AND FULL YEAR 2015
* Fourth quarter 2015 CCS earnings (see Note 2) were $1,840 million, 56%
lower than for the same quarter a year ago. Full year 2015 CCS earnings
were $3,842 million, 80% lower than in 2014
* Fourth quarter 2015 CCS earnings excluding identified items (see page 5)
were $1,825 million compared with $3,262 million for the fourth quarter
2014, a decrease of 44%. Fourth quarter 2015 CCS earnings excluding
identified items benefited from continued strong Downstream results
reflecting steps taken by the company to improve financial performance. In
Upstream, earnings were impacted by the significant decline in oil and gas
prices, partly offset by lower costs. Contributions from integrated gas
were higher mainly as a result of improved trading performance and the
effect of the strengthening of the Australian dollar on deferred tax
positions.
Full year 2015 CCS earnings excluding identified items were $10,676 million
compared with $22,562 million in 2014, a decrease of 53%.
* Basic CCS earnings per share for the fourth quarter 2015 decreased by 56%
versus the same quarter a year ago. Full year 2015 basic CCS earnings per
share decreased by 80% versus 2014.
* Basic CCS earnings per share excluding identified items for the fourth
quarter 2015 decreased by 44% versus the same quarter a year ago. Full year
2015 basic CCS earnings per share excluding identified items decreased by
53% versus 2014.
* Cash flow from operating activities for the fourth quarter 2015 was $5.4
billion, compared with $9.6 billion for the same quarter last year.
Excluding working capital movements, cash flow from operating activities
for the fourth quarter 2015 was $3.8 billion, compared with $3.5 billion
for the same quarter last year.
Full year 2015 cash flow from operating activities was $29.8 billion, compared
with $45.0 billion in 2014. Excluding working capital movements, cash flow from
operating activities for the full year 2015 was $24.3 billion, compared with
$38.6 billion in 2014
* Capital investment (see Note B) for the fourth quarter 2015 was $7.9
billion and divestments (see Note C) were $1.7 billion.
Full year 2015 capital investment was $28.9 billion, $8.4 billion lower than in
2014. This was delivered by efficiency improvements and more selectivity on new
investments. Capital investment for Shell and BG combined for the full year
2016 is expected to be $33 billion, down some 45% from combined spending, which
peaked in 2013. Flexibility for further reductions is available and will be
utilised should conditions warrant this. Full year 2015 divestments were $5.5
billion, of which proceeds from the sales of interests in Shell Midstream
Partners, L.P. were $0.6 billion.
* Operating costs (see Note F) for the full year 2015 decreased by $4.1
billion, to $41.1 billion, and Shell's costs are expected to fall again in
2016, by a further $3 billion. This is some 15% lower than 2014 levels.
Synergies from the BG combination will be in addition to that.
* Total dividends distributed to Royal Dutch Shell plc shareholders in the
fourth quarter 2015 were $3.0 billion, of which $1.2 billion were settled
by issuing some 49.0 million A shares under the Scrip Dividend Programme.
Total dividends distributed in the full year 2015 were $12.0 billion, of
which $2.6 billion were settled by issuing some 96.3 million A shares under
the Scrip Dividend Programme.
* Under our share buyback programme during the full year 2015, some 12.7
million shares were bought back for cancellation for a consideration of
$0.4 billion. No shares were bought back during the fourth quarter.
* Return on average capital employed on a reported income basis (see Note D)
was 1.9% at the end of 2015 compared with 7.1% at the end of 2014.
* Gearing (see Note E) was 14.0% at the end of 2015 versus 12.2% at the end
of 2014.
* Oil and gas production for the fourth quarter 2015 was 3,039 thousand boe/
d, a decrease of 5% compared with the fourth quarter 2014. Fourth quarter
2015 production was in line with the same period last year excluding the
impact of divestments, curtailment and underground storage reinjection at
NAM in the Netherlands, a Malaysia PSC expiry, PSC price effects, and
security impacts in Nigeria.
Full year 2015 oil and gas production was 2,954 thousand boe/d, a decrease of
4% compared with 2014. Full year 2015 production volumes increased by 1%
compared with 2014, excluding the impact of divestments, curtailment and
underground storage reinjection at NAM in the Netherlands, Abu Dhabi licence
and Malaysia PSC expiries, PSC price effects, and security impacts in Nigeria.
* Equity sales of LNG of 5.68 million tonnes for the fourth quarter 2015 were
8% lower than for the same quarter a year ago.
Full year 2015 equity sales of LNG of 22.62 million tonnes were 6% lower than
in 2014.
* Oil products sales volumes for the fourth quarter 2015 were 1% lower than
for the fourth quarter 2014. Chemicals sales volumes for the fourth quarter
2015 increased by 7% compared with the same quarter a year ago.
Full year 2015 oil products sales volumes were 1% higher than in 2014. Full
year 2015 chemicals sales volumes increased by 1% compared with 2014.
* When the 2015 Annual Report and Form 20-F is filed, the proved reserves
reporting will update on Shell's 2015 performance, and will not include
reserves from the proposed combination with BG.
* At the end of 2015, total proved reserves on an SEC basis are expected to
be 11.7 billion boe, after taking into account 2015 production.
With 2015 production of 1.1 billion boe, our proved Reserves Replacement Ratio
for the year on an SEC basis is expected to be -20%, a total reduction of 1.4
billion boe to our SEC proved reserves.The 3-year average headline proved
Reserves Replacement Ratio on an SEC basis is expected to be 48%.
When final volumes are reported in the 2015 Annual Report and Form 20-F, Shell
expects that SEC proved oil and gas reserves will be reduced by 0.2 billion
boe, before taking into account production.
Falling oil prices have reduced Shell's reserves in 2015. Consistent with our
past practise, the impact of changing prices is calculated by replacing the
2014 year average price with the 2015 year average price to determine the
potential adjustment to SEC proved reserves at the end of 2014. Applying this
methodology, 1.7 billion of proved reserves would have been excluded from our
2014 SEC proved reserves if the 2015 year average price was used. This
adjustment of 1.7 billion boe includes de-booking of 0.4 billion boe of proved
reserves at Carmon Creek in Canada, and 0.95 billion boe associated with Muskeg
River Mine in Canada. However, due to significant structural cost improvements
at the mine in 2015 these 0.95 billion boe are retained in 2015. These barrels
are not considered additions for SEC reporting purposes as they were included
in our 2014 SEC proved reserves.
Further information will be provided in our 2015 Annual Report and Form 20-F,
which is expected to be filed in March 2016.
* Supplementary financial and operational disclosure for the fourth quarter
2015 is available at www.shell.com/investor
SUMMARY OF IDENTIFIED ITEMS
Earnings for the fourth quarter 2015 reflected the following items, which in
aggregate amounted to a net gain of $15 million (compared with a net gain of
$901 million for the fourth quarter 2014), as summarised in the table below:
* Upstream earnings included a net charge of $826 million, primarily
reflecting asset impairments of some $640 million and a net charge on fair
value accounting of certain commodity derivatives and gas contracts of some
$210 million, partly offset by gains on divestments of some $100 million.
Upstream earnings for the fourth quarter 2014 included a net gain of $915
million.
* Downstream earnings included a net gain of $978 million, primarily
reflecting gains on divestments of some $995 million and the net positive
impact of fair value accounting of commodity derivatives of some $100
million, offset by impairment charges of some $100 million. Downstream
earnings for the fourth quarter 2014 included a net charge of $6 million.
* Corporate results and Non-controlling interest included a net charge of
$137 million, mainly reflecting a tax provision. Earnings for the fourth
quarter 2014 included a net charge of $8 million.
SUMMARY OF IDENTIFIED ITEMS
Quarters $ million Full year
Q4 2015 Q3 2015 Q4 2014 2015 2014
Segment earnings impact of
identified items:
(826) (8,218) 915 Upstream (7,443) (664)
978 (136) (6) Downstream 495 (2,854)
(137) 464 (8) Corporate and Non-controlling 114 (3)
interest
15 (7,890) 901 Earnings impact (6,834) (3,521)
These identified items are shown to provide additional insight into segment
earnings and income attributable to shareholders. They include the full impact
on Shell's CCS earnings of the following items:
* Divestment gains and losses
* Impairments
* Fair value accounting of commodity derivatives and certain gas contracts
(see Note A)
* Redundancy and restructuring
Further items may be identified in addition to the above.
EARNINGS BY BUSINESS SEGMENT
UPSTREAM
Quarters $ million Full year
Q4 2015 Q3 2015 Q4 2014 %1 2015 2014 %
493 (425) 1,730 -72 Upstream earnings excluding 1,780 16,505 -89
identified items
(333) (8,643) 2,645 -113 Upstream earnings (5,663) 15,841 -136
2,916 4,044 4,991 -42 Upstream cash flow from operating 13,181 31,839 -59
activities
5,820 5,848 7,511 -23 Upstream capital investment 23,527 31,293 -25
1,532 1,528 1,526 - Liquids production available for 1,509 1,484 +2
sale (thousand b/d)
8,741 7,837 9,782 -11 Natural gas production available for 8,380 9,259 -9
sale (million scf/d)
3,039 2,880 3,213 -5 Total production available for sale 2,954 3,080 -4
(thousand boe/d)
5.68 5.31 6.20 -8 Equity sales of LNG (million tonnes) 22.62 23.97 -6
1 Q4 on Q4 change
Fourth quarter Upstream earnings excluding identified items were $493 million
compared with $1,730 million a year ago. Identified items were a net charge of
$826 million compared with a net gain of $915 million for the fourth quarter
2014 (see page 5).
Compared with the fourth quarter 2014, earnings excluding identified items were
impacted by the significant decline in oil and gas prices. This was partly
offset by decreased costs and lower exploration expenses, including lower well
write-offs, and lower taxation.
Compared with the fourth quarter 2014, earnings benefited from the impact of
the strengthening of the Australian dollar and Brazilian real on deferred tax
positions, which increased earnings by $553 million and $135 million
respectively. The benefit of these deferred tax movements in the fourth quarter
2015 was $257 million after tax, compared with a negative impact of some $431
million after tax in the same period a year ago.
Upstream Americas excluding identified items incurred a loss.
Global liquids realisations were 46% lower than for the fourth quarter 2014.
Global natural gas realisations were 33% lower than for the same quarter a year
ago, with a 44% decrease in the Americas and a 31% decrease outside the
Americas.
Fourth quarter 2015 production was 3,039 thousand boe/d compared with 3,213
thousand boe/d a year ago. Liquids production was in line with the same period
a year ago and natural gas production decreased by 11% compared with the fourth
quarter 2014. Fourth quarter 2015 production was in line with the same period
last year excluding the impact of divestments, curtailment and underground
storage reinjection at NAM in the Netherlands, a Malaysia PSC expiry, PSC price
effects, and security impacts in Nigeria.
The continuing ramp-up of existing fields, in particular Cardamom and Mars B in
the Americas, Bonga Main in Nigeria and Gumusut-Kakap in Malaysia, contributed
some 88 thousand boe/d to production compared with the fourth quarter 2014.
Equity LNG sales volumes of 5.68 million tonnes decreased by 8% compared with
the same quarter a year ago, mainly reflecting the expiry of the Malaysia LNG
Dua JVA.
Full year Upstream earnings excluding identified items were $1,780 million
compared with $16,505 million in 2014. Identified items were a net charge of
$7,443 million, compared with a net charge of $664 million in 2014 (see page
5).
Compared with 2014, Upstream earnings excluding identified items were impacted
by the significant decline in oil and gas prices. Earnings benefited from lower
costs including favourable exchange rate effects and divestments, and decreased
depreciation.
Compared with 2014, the impact of the weakening of the Australian dollar and
Brazilian real on deferred tax positions reduced earnings by $131 million and
$311 million respectively. The impact of these deferred tax movements in the
full year 2015 was $1,022 million after tax, compared with an impact of $580
million after tax in 2014.
Global liquids realisations were 48% lower than in 2014. Global natural gas
realisations were 27% lower than in 2014, with a 47% decrease in the Americas
and a 24% decrease outside the Americas.
Full year 2015 production was 2,954 thousand boe/d compared with 3,080 thousand
boe/d in 2014. Liquids production increased by 2% and natural gas production
decreased by 9% compared with 2014. Production volumes in 2015 increased by 1%,
compared with 2014, excluding the impact of divestments, curtailment and
underground storage reinjection at NAM in the Netherlands, Abu Dhabi license
and Malaysia PSC expiries, PSC price effects, and security impacts in Nigeria.
New field start-ups and the continuing ramp-up of existing fields, in
particular Cardamom and Mars B in the Americas and Bonga NW in Nigeria,
contributed some 117 thousand boe/d to production in 2015, which more than
offset the impact of field declines.
Equity LNG sales volumes of 22.62 million tonnes were 6% lower than in 2014,
mainly reflecting the expiry of the Malaysia LNG Dua JVA, the Woodside
divestment and increased maintenance activities.
DOWNSTREAM
Quarters $ million Full year
Q4 2015 Q3 2015 Q4 2014 %1 2015 2014 %
1,524 2,617 1,550 -2 Downstream CCS earnings excluding 9,748 6,265 +56
identified items
2,502 2,481 1,544 +62 Downstream CCS earnings 10,243 3,411 +200
2,101 6,605 4,698 -55 Downstream cash flow from operating 14,076 11,292 +25
activities
1,974 1,211 2,098 -6 Downstream capital investment 5,119 5,910 -13
2,630 2,776 2,718 -3 Refinery processing intake (thousand 2,805 2,903 -3
b/d)
6,297 6,586 6,392 -1 Oil products sales volumes (thousand 6,432 6,365 +1
b/d)
4,178 4,452 3,895 +7 Chemicals sales volumes (thousand 17,148 17,008 +1
tonnes)
1 Q4 on Q4 change
Fourth quarter Downstream earnings excluding identified items were $1,524
million compared with $1,550 million for the fourth quarter 2014. Identified
items were a net gain of $978 million, compared with a net charge of $6 million
for the fourth quarter 2014 (see page 5).
Compared with the fourth quarter 2014, Downstream earnings excluding identified
items benefited from improved refining industry conditions. Earnings also
benefited from lower costs including favourable exchange rate effects, and
lower taxation. Earnings were impacted by lower results from marketing, largely
as a result of negative exchange rate effects, and decreased contributions from
trading and supply. Contributions from Chemicals decreased mainly as a result
of weaker base chemicals and intermediates industry conditions.
Refinery intake volumes were 3% lower compared with the same quarter last year.
Refinery availability was 83%, compared with 95% for the fourth quarter 2014,
mainly as a result of increased maintenance.
Oil products sales volumes decreased by 1% compared with the same period a year
ago, mainly reflecting lower trading volumes.
Chemicals sales volumes increased by 7% compared with the same quarter last
year. Chemicals manufacturing plant availability increased to 81% from 65% for
the fourth quarter 2014, reflecting recovery at the Moerdijk chemical site in
the Netherlands, partly offset by increased maintenance activities.
Full year Downstream earnings excluding identified items were $9,748 million
compared with $6,265 million in 2014. Identified items were a net gain of $495
million, compared with a net charge of $2,854 million in 2014 (see page 5).
Compared with 2014, Downstream earnings excluding identified items benefited
from higher realised refining margins, reflecting the industry environment,
lower costs including the impact of favourable exchange rate effects and
divestments, and lower taxation. Contributions from marketing were impacted by
negative exchange rate effects, with strong underlying performance.
Contributions from Chemicals increased, reflecting improved industry conditions
for intermediates and for base chemicals in Asia, partly offset by unit
shut-downs at the Moerdijk chemical site in the Netherlands.
Refinery intake volumes were 3% lower compared with 2014. Excluding portfolio
impacts, refinery intake volumes were 1% lower than in 2014. Refinery
availability was 90%, compared with 93% in 2014.
Oil products sales volumes increased by 1% compared with 2014, mainly
reflecting higher trading volumes.
Chemicals sales volumes increased by 1% compared with 2014, primarily driven by
increased demand in Asia and overall improved intermediates market conditions.
Chemicals manufacturing plant availability was 85%, in line with 2014.
CORPORATE AND NON-CONTROLLING INTEREST
Quarters $ million Full year
Q4 2015 Q3 2015 Q4 2014 2015 2014
(192) (422) (18) Corporate and Non-controlling interest (852) (208)
excl. identified items
Of which:
(158) (355) (24) Corporate (536) (153)
(34) (67) 6 Non-controlling interest (316) (55)
(329) 42 (26) Corporate and Non-controlling interest (738) (211)
Fourth quarter Corporate results and Non-controlling interest excluding
identified items were a loss of $192 million, compared with a loss of $18
million for the same period last year. Identified items for the fourth quarter
2015 were a net charge of $137 million, whereas earnings for the fourth quarter
2014 included a net charge of $8 million (see page 5).
Compared with the fourth quarter 2014, Corporate results excluding identified
items mainly reflected lower tax credits and higher net interest expense,
partly offset by favourable exchange rate effects.
Compared with the fourth quarter 2014, earnings were negatively impacted by the
strengthening Brazilian real on deferred tax positions related to financing of
the Upstream business by $84 million. The impact of this on the fourth quarter
2015 earnings excluding identified items was a charge of $4 million after tax,
compared with an $80 million gain in the same period a year ago.
Full year Corporate results and Non-controlling interest excluding identified
items were a loss of $852 million compared with a loss of $208 million in 2014.
Identified items for 2015 were a net gain of $114 million, whereas earnings for
2014 included a net charge of $3 million (see page 5).
Compared with 2014, Corporate results excluding identified items mainly
reflected adverse currency exchange rate effects, partly offset by higher tax
credits.
Compared with 2014, earnings benefited from the impact of the weakening
Brazilian real on deferred tax positions related to financing of the Upstream
business by $160 million. The impact of this on the full year 2015 earnings
excluding identified items was a gain of $252 million after tax, compared with
a gain of $92 million in 2014.
OPERATIONAL OUTLOOK FOR THE FIRST QUARTER 2016
The following information reflects Shell's asset base as of December 31, 2015.
Compared with the first quarter 2015, Upstream earnings are expected to be
impacted by some 40 thousand boe/d associated with the impact of curtailment
and underground storage utilisation at NAM, some 20 thousand boe/d related to a
Malaysia PSC expiry, and some 15 thousand boe/d as a result of divestments. The
impact of maintenance is expected to be lower by some 30 thousand boe/d. In
Qatar, the Pearl GTL plant will undergo planned maintenance starting in March
and continuing into the second quarter 2016.
Refinery availability is expected to decline in the first quarter 2016 as a
result of higher turnaround activity and increased maintenance compared with
the same period a year ago. Unit shutdowns at the Bukom chemical site in
Singapore are expected to result in similar Chemicals manufacturing plant
availability as in the first quarter 2015, which was heavily impacted by unit
shutdowns at the Moerdijk chemical site in the Netherlands.
Upon the successful completion of the recommended combination with BG which it
is expected on February 15, 2016, Shell's consolidated financial results will
include BG's financial performance and the fair values of its assets and
liabilities.
FORTHCOMING EVENTS
First quarter 2016 results and first quarter 2016 dividend are scheduled to be
announced on May 4, 2016. Second quarter 2016 results and second quarter 2016
dividend are scheduled to be announced on July 28, 2016. Third quarter 2016
results and third quarter 2016 dividend are scheduled to be announced on
October 27, 2016.
Shell's Capital Markets Day will be held on June 7, 2016 in London, United
Kingdom.
PROFIT ESTIMATES
Certain statements set out in the update on fourth quarter 2015 and full year
unaudited results and related supplementary prospectus published by Shell on
January 20, 2016 represented profit estimates under the UK City Code on
Takeovers and Mergers. The profit estimates relating to the fourth quarter
ended December 31, 2015 have been confirmed by the fourth quarter results set
out in this announcement and the profit estimates relating to the full year
ended December 31, 2015 have been superseded by the publication of the
unaudited full year results set out in this announcement.
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
Quarters $ million Full year
Q4 2015 Q3 2015 Q4 2014 %1 2015 2014 %
58,146 68,706 92,374 Revenue 264,960 421,105
793 193 818 Share of profit of joint 3,527 6,116
ventures and associates
1,237 285 974 Interest and other income 3,669 4,123
60,176 69,184 94,166 Total revenue and other income 272,156 431,344
43,166 51,612 73,640 Purchases 194,644 327,278
7,515 7,419 7,465 Production and manufacturing 28,095 30,038
expenses
3,090 2,896 3,426 Selling, distribution and 11,956 13,965
administrative expenses
297 291 363 Research and development 1,093 1,222
549 3,406 1,323 Exploration 5,719 4,224
5,281 12,156 4,991 Depreciation, depletion and 26,714 24,499
amortisation
519 527 430 Interest expense 1,888 1,804
(241) (9,123) 2,528 -110 Income/(loss) before taxation 2,047 28,314 -93
(1,183) (1,730) 2,110 Taxation (153) 13,584
942 (7,393) 418 +125 Income/(loss) for the period 2,200 14,730 -85
3 23 (177) Income/(loss) attributable to 261 (144)
non-controlling interest
939 (7,416) 595 +58 Income/(loss) attributable to 1,939 14,874 -87
Royal Dutch Shell plc
shareholders
1 Q4 on Q4 change
EARNINGS PER SHARE
Quarters $ Full year
Q4 2015 Q3 2015 Q4 2014 2015 2014
0.15 (1.17) 0.09 Basic earnings per share 0.31 2.36
0.15 (1.16) 0.09 Diluted earnings per share 0.30 2.36
SHARES1
Quarters Millions Full year
Q4 2015 Q3 2015 Q4 2014 2015 2014
Weighted average number of shares
as the basis for:
6,356.0 6,327.7 6,301.0 Basic earnings per share 6,320.3 6,311.5
6,416.1 6,396.9 6,301.1 Diluted earnings per share 6,393.8 6,311.6
6,397.5 6,348.4 6,295.0 Shares outstanding at the end of 6,397.5 6,295.0
the period
1 Royal Dutch Shell plc ordinary shares of €0.07 each
Notes 1 to 6 are an integral part of these unaudited Condensed Consolidated
Financial Statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarters $ million Full year
Q4 2015 Q3 2015 Q4 2014 2015 2014
942 (7,393) 418 Income/(loss) for the period 2,200 14,730
Other comprehensive income net of
tax:
Items that may be reclassified to
income in later periods:
(1,249) (3,341) (2,398) * Currency translation differences (7,121) (5,321)
(119) (324) (560) * Unrealised gains/(losses) on (707) (797)
securities
(202) 139 537 * Cash flow hedging gains/(losses) 61 528
(41) 19 (86) * Share of other comprehensive (40) (156)
income/(loss) of joint ventures
and associates
(1,611) (3,507) (2,507) Total (7,807) (5,746)
Items that are not reclassified to
income in later periods:
3,140 (2,369) (3,011) * Retirement benefits 4,951 (6,482)
remeasurements
1,529 (5,876) (5,518) Other comprehensive income/(loss) for (2,856) (12,228)
the period
2,471 (13,269) (5,100) Comprehensive income/(loss) for the (656) 2,502
period
(16) (53) (163) Comprehensive income/(loss) 155 (190)
attributable to non-controlling
interest
2,487 (13,216) (4,937) Comprehensive income/(loss) (811) 2,692
attributable to Royal Dutch Shell plc
shareholders
Notes 1 to 6 are an integral part of these unaudited Condensed Consolidated
Financial Statements.
CONDENSED CONSOLIDATED BALANCE SHEET
$ million
Dec 31, 2015 Sep 30, 2015 Dec 31, 2014
Assets
Non-current assets:
Intangible assets 6,283 6,300 7,076
Property, plant and equipment 182,838 181,681 192,472
Joint ventures and associates 30,150 30,940 31,558
Investments in securities 3,416 3,573 4,115
Deferred tax1 11,033 10,258 8,131
Retirement benefits 4,362 2,366 1,682
Trade and other receivables 8,717 8,331 8,304
246,799 243,449 253,338
Current assets:
Inventories 15,822 19,276 19,701
Trade and other receivables 45,784 49,130 58,470
Cash and cash equivalents 31,752 31,846 21,607
93,358 100,252 99,778
Total assets 340,157 343,701 353,116
Liabilities
Non-current liabilities:
Debt 52,849 50,438 38,332
Trade and other payables 4,528 4,510 3,582
Deferred tax1 8,976 9,935 12,052
Retirement benefits 12,587 14,557 16,318
Decommissioning and other provisions 26,148 25,110 23,834
105,088 104,550 94,118
Current liabilities:
Debt 5,530 5,149 7,208
Trade and other payables 52,770 55,230 64,864
Taxes payable 8,233 10,378 9,797
Retirement benefits 350 359 377
Decommissioning and other provisions 4,065 5,553 3,966
70,948 76,669 86,212
Total liabilities 176,036 181,219 180,330
Equity attributable to Royal Dutch Shell plc 162,876 161,348 171,966
shareholders
Non-controlling interest 1,245 1,134 820
Total equity 164,121 162,482 172,786
Total liabilities and equity 340,157 343,701 353,116
1 Deferred tax assets increased and deferred tax liabilities decreased in 2015
primarily as a result of the impairments described in Note 2.
Notes 1 to 6 are an integral part of these unaudited Condensed Consolidated
Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to Royal Dutch Shell plc shareholders
$ million Share Shares held in trust Other reserves Retained Total Non-controlling interest Total
capital earnings equity
At January 1, 540 (1,190) (14,365) 186,981 171,966 820 172,786
2015
Comprehensive
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