SHELL PLC
longer included in sales volumes (see Note 2). Excluding this impact,
Oil Products sales volumes decreased due to the impact of COVID-19 with
lower Refining & Trading and Marketing sales volumes, compared with the
fourth quarter 2019.
--Refining & Trading Adjusted Earnings reflected lower realised refining
margins, and lower contributions from trading and optimisation. This was
partly offset by favourable deferred tax movements and lower operating
expenses, compared with the fourth quarter 2019.
--Marketing Adjusted Earnings reflected lower marketing sales volumes
and unfavourable deferred tax movements, partly offset by strong retail
and global commercial margins, and lower operating expenses, compared
with the fourth quarter 2019.
With effect from January 1, 2020, Shell discloses utilisation instead of
availability to improve transparency on refinery production volumes.
Utilisation is defined as the actual usage of the plants as a percentage
of the rated capacity. Refinery utilisation was 72% compared with 78% in
the fourth quarter 2019, mainly due to lower demand and economic
optimisation of the plants, as well as the shutdown of the Convent
Refinery.
Full year segment earnings were a loss of $494 million. This included a
post-tax impairment charge of $5,530 million, as a result of revised
medium- and long-term price outlook assumptions in response to changes
to the energy market demand and supply fundamentals as well as the
macroeconomic conditions and the COVID-19 pandemic, and the shutdown of
the Convent Refinery in the USA. This shutdown also led to further
post-tax charges of $661 million, related to provisions for onerous
contracts, and redundancy and restructuring. Segment earnings also
included further redundancy and
Page 5
ROYAL DUTCH SHELL PLC 4TH QUARTER 2020 AND FULL YEAR
UNAUDITED RESULTS
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restructuring costs of $223 million and a net charge of $101 million due
to the fair value accounting of commodity derivatives. These net charges
are part of identified items (see Reference A).
Compared with the full year 2019, Oil Products Adjusted Earnings of
$5,995 million reflected lower realised refining margins and lower
marketing sales volumes due to the weak macroeconomic environment and
the COVID-19 pandemic. These were partly offset by lower operating
expenses, contributions from crude and oil products trading and
optimisation, and favourable deferred tax movements.
Cash flow from operating activities for the full year 2020 was $10,845
million, primarily driven by Adjusted Earnings before depreciation and
positive working capital movements. This was partly offset by
cost-of-sales adjustments for the full year 2020.
With effect from January 1, 2020, certain Oil Products contracts are no
longer included in sales volumes (see Note 2). Excluding this impact,
Oil Products sales volumes decreased due to lower refining & trading and
marketing sales volumes, compared with the full year 2019.
--Refining & Trading Adjusted Earnings reflected lower realised refining
margins, partly offset by lower operating expenses, contributions from
crude and oil products trading and optimisation as well as favourable
deferred tax movements, compared with the full year 2019.
--Marketing Adjusted Earnings reflected lower marketing sales volumes
due to the COVID-19 pandemic, partly offset by strong retail and global
commercial margins, and lower operating expenses, compared with the full
year 2019.
With effect from January 1, 2020, Shell discloses utilisation instead of
availability to improve transparency on refinery production volumes.
Utilisation is defined as the actual usage of the plants as a percentage
of the rated capacity. Refinery utilisation was 72% compared with 78% in
the full year 2019, mainly due to lower demand and economic optimisation
of the plants.
Page 6
ROYAL DUTCH SHELL PLC 4TH QUARTER 2020 AND FULL YEAR
UNAUDITED RESULTS
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CHEMICALS
Quarters $ million Full year
Q4 2020 Q3 2020 Q4 2019 %(1) 2020 2019 %
367 131 (78) +570 Segment earnings(2) 808 479 +69
(14) (96) (13) Of which: Identified items (Reference A) (154) (263)
381 227 (65) +685 Adjusted Earnings(2) 962 741 +30
774 335 (44) +1854 Cash flow from operating activities 1,664 1,394 +19
Cash flow from operating activities excluding working
775 488 338 +129 capital movements (Reference H) 1,756 1,721 +2
830 595 1,023 Cash capital expenditure (Reference C) 2,640 4,090
3,718 3,823 3,454 +8 Chemicals sales volumes (thousand tonnes) 15,036 15,223 -1
------- ------- ------- --------- --------------------------------------------------------- -------- -------- -------
1. Q4 on Q4 change.
2. Earnings are presented on a CCS basis (see Note 2).
Fourth quarter segment earnings were $367 million, which reflected
higher realised margins in base chemicals and intermediates from a
stronger price environment, compared with the fourth quarter 2019. There
were no significant identified items during the quarter.
Cash flow from operating activities for the quarter was $774 million,
primarily driven by Adjusted Earnings before depreciation and dividends
received from joint ventures.
With effect from January 1, 2020, Shell discloses utilisation instead of
availability to improve transparency on chemicals production volumes.
Utilisation is defined as the actual usage of the plants as a percentage
of the rated capacity. Chemicals manufacturing plant utilisation in the
fourth quarter 2020 was 79% compared with 71% in the fourth quarter
2019, mainly due to improved site availability, with a higher level of
maintenance activities in 2019.
Full year segment earnings were $808 million, which reflected higher
realised margins from a stronger price environment in the fourth quarter,
partly offset by lower volumes due to the COVID-19 pandemic compared
with the full year 2019. Segment earnings included a charge of $104
million due to a legal provision and redundancy and restructuring costs
of $38 million. These net charges are part of identified items (see
Reference A).
Compared with the full year 2019, Chemicals Adjusted Earnings of $962
million reflected higher realised margins from a stronger price
environment in the fourth quarter, partly offset by lower volumes due to
the COVID-19 pandemic.
Cash flow from operating activities for the full year 2020 was an inflow
of $1,664 million, primarily driven by Adjusted Earnings before
depreciation. This was partly offset by cost-of-sales adjustments for
the full year 2020.
With effect from January 1, 2020, Shell discloses utilisation instead of
availability to improve transparency on chemicals production volumes.
Utilisation is defined as the actual usage of the plants as a percentage
of the rated capacity. Chemicals manufacturing plant utilisation was 80%
compared with 76% in the full year 2019, mainly due to higher
maintenance activities in Asia and Europe in 2019, and the impact of
strike actions in the Netherlands in 2019.
Page 7
ROYAL DUTCH SHELL PLC 4TH QUARTER 2020 AND FULL YEAR
UNAUDITED RESULTS
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CORPORATE
Quarters $ million Full year
Q4 2020 Q3 2020 Q4 2019 2020 2019
(954) (739) (1,151) Segment earnings (2,952) (3,273)
(118) 52 (76) Of which: Identified items (Reference A) 460 109
(836) (792) (1,075) Adjusted Earnings (3,412) (3,383)
102 514 321 Cash flow from operating activities 384 44
(17) (33) (9) Cash flow from operating activities excluding working 101 (274)
capital movements (Reference H)
------- ------- --------- ----------------------------------------------------------- --------- ---------
Fourth quarter segment earnings were an expense of $954 million. This
included a loss of $124 million from the deferred tax impact of the
strengthening Brazilian real on financing positions, which is part of
identified items (see Reference A).
Adjusted Earnings were an expense of $836 million, reflecting favourable
currency exchange rate effects and lower net interest expense, compared
with the fourth quarter 2019.
Full year segment earnings were an expense of $2,952 million. This
included gains of $454 million from the deferred tax impact of the
weakening Brazilian real on financing positions, which is part of
identified items (see Reference A).
Adjusted Earnings were an expense of $3,412 million, reflecting adverse
currency exchange rate effects and lower interest expense, compared with (MORE TO FOLLOW) Dow Jones Newswires
02-04-21 0216ET
