"The war in
Generating value through strong earnings and cash flow, coupled with maintaining a healthy balance sheet and continuing the disciplined delivery of our strategy, are crucial for
STRONG RESULTS IN VOLATILE TIMES
- Strong Q1 2022 Adjusted Earnings of
$9.1 billion in a volatile geopolitical and macroeconomic environment. Adjusted EBITDA of$19.0 billion in Q1 2022 versus$16.3 billion in Q4 2021. - Dividend increased by ~4% to
$0.25 per share for Q1 2022. Of the$8.5 billion share buyback programme announced for the first half of 2022,$4 billion has been completed to date. The remaining$4.5 billion share buybacks are expected to be completed before the Q2 2022 results announcement. With the current macro outlook and subject to Board approval, shareholder distributions for the second half of 2022 are expected to be in excess of 30% of CFFO. - Following decisive action on
Russia , taken$3.9 billion of post-tax charges in Q1 2022 as part of Identified items. - Share simplification completed and new reporting segments launched - additional Renewables & Energy Solutions and Marketing disclosures.
$ million | Adj. Earnings1 | Adj. EBITDA (CCS) | CFFO | Cash capex | |
4,093 | 6,315 | 6,443 | 863 | ||
Upstream | 3,450 | 8,977 | 5,964 | 1,707 | |
Marketing | 737 | 1,323 | (530) | 473 | |
Mobility | 277 | 664 | 319 | ||
Lubricants | 338 | 470 | 39 | ||
Sectors & Decarbonisation | 121 | 188 | 115 | ||
Chemicals & Products | 1,168 | 2,006 | 3,673 | 998 | |
Chemicals | 31 | 176 | 714 | ||
Products | 1,137 | 1,830 | 284 | ||
Renewables & Energy Solutions | 344 | 521 | (459) | 985 | |
Corporate | (548) | (114) | (277) | 37 | |
Less: Non-controlling interest | 114 | ||||
Q1 2022 | 9,130 | 19,028 | 14,815 | 5,064 | |
Q4 2021 | 6,391 | 16,349 | 8,170 | 6,500 |
1 Income/( loss) attributable to shareholders for Q1 2022 is
- Strong CFFO reflecting net favourable derivatives movements, mainly due to settlement of derivative contracts in Q1 2022 for which variation margins cash outflows have taken place in 2021. Tax paid & other includes a tax paid outflow of
$2.2 billion , offset by current cost of supply adjustment and other movements. Working capital mainly impacted by inventory price effect of$6.4 billion and Initial Margin outflows of$1.7 billion . - Net debt reduced by ~8%, from
$52.6 billion in Q4 2021 to$48.5 billion in Q1 2022.
$ billion | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 |
Divestment proceeds | 3.4 | 1.3 | 1.3 | 9.1 | 0.7 |
Free cash flow | 7.7 | 9.7 | 12.2 | 10.7 | 10.5 |
Net debt | 71.3 | 65.7 | 57.5 | 52.6 | 48.5 |
Q1 2022 FINANCIAL PERFORMANCE DRIVERS
INTEGRATED GAS
Key data | Q4 2021 | Q1 2022 | Q2 2022 outlook |
Realised liquids price ($/bbl) | 77.20 | 88.76 | — |
Realised gas price ($/mscf) | 9.07 | 10.31 | — |
Production (kboe/d) | 978 | 896 | 910 - 960 |
LNG liquefaction volumes (MT) | 7.94 | 8.00 | 7.4 - 8.0 |
LNG sales volumes (MT) | 16.72 | 18.29 | — |
- Adjusted Earnings benefited from higher realised prices offset by lower production due to maintenance activities, including the planned turnaround of one of the trains at Pearl GTL and maintenance at Prelude FLNG.
- Trading and optimisation results for
Integrated Gas were similar to Q4 2021, continuing to benefit from favourable trading conditions. - The Q2 2022 outlook reflects the derecognition of Sakhalin-related volumes (a reduction of 0.8 MT in LNG liquefaction volumes compared with Q1 2022).
UPSTREAM
Key data | Q4 2021 | Q1 2022 | Q2 2022 outlook |
Realised liquids price ($/bbl) | 73.54 | 88.63 | — |
Realised gas price ($/mscf) | 9.29 | 8.79 | — |
Liquids production (kboe/d) | 1,456 | 1,403 | — |
Gas production (mscf/d) | 3,799 | 3,606 | — |
Total production (kboe/d) | 2,110 | 2,025 | 1,750 - 1,950 |
- Production 4% below Q4 2021, mainly driven by Permian divestment and lower demand due to a milder winter, partly offset by comparative help from Hurricane Ida recovery and lower maintenance.
- Adjusted Earnings benefited from higher prices, partly offset by impacts from the Permian divestment.
- The Q2 2022 production outlook reflects lower seasonal gas demand and higher scheduled maintenance, mainly in the US Gulf of Mexico.
MARKETING
Key data | Q4 2021 | Q1 2022 | Q2 2022 outlook |
Marketing sales volumes (kb/d) | 2,522 | 2,372 | 2,300 - 2,800 |
Mobility (kb/d) | 1,798 | 1,591 | — |
Lubricants (kb/d) | 81 | 92 | — |
Sectors & Decarbonisation (kb/d) | 644 | 690 | — |
- Marketing margins are in line with Q4 2021, with the effect of lower volumes in Mobility being offset by higher volumes in Lubricants.
- Marketing Adjusted Earnings better than Q4 2021 due to lower Opex driven by seasonal trends.
CHEMICALS & PRODUCTS
Key data | Q4 2021 | Q1 2022 | Q2 2022 outlook |
Refining & Trading sales volumes (kb/d) | 1,929 | 1,598 | — |
Chemicals sales volumes (kT) | 3,475 | 3,330 | 3,100 - 3,500 |
Refinery utilisation (%) | 68 | 71 | 65 - 73 |
Chemicals manufacturing plant utilisation (%) | 75 | 78 | 69 - 77 |
Global indicative refining margin ($/bbl) | 7 | 10 | — |
Global indicative chemical margin ($/t) | 147 | 98 | — |
- Higher realised refining margins due to market volatility and improved utilisation. Trading and optimisation significantly higher than Q4 2021.
- Chemicals margins are in line with the Q4 2021 break-even, reflecting higher utilisation offsetting lower unit margins.
- The utilisation for both refineries and chemicals manufacturing plants in Q2 2022 is expected to be impacted by scheduled turnarounds and maintenance.
RENEWABLES & ENERGY SOUTIONS
Key data | Q4 2021 | Q1 2022 |
Adj. Earnings ($ billion) | 0.0 | 0.3 |
Adj. EBITDA ($ billion) | 0.1 | 0.5 |
External power sales (TWh) | 59 | 57 |
Sales of pipeline gas to end-use customers (TWh) | 249 | 257 |
Renewable power generation capacity | 4.6 | 4.6 |
in operation (GW) | 1.2 | 1.0 |
under construction and/or committed for sale (GW) | 3.4 | 3.6 |
- Adjusted Earnings and Adjusted EBITDA benefited from higher trading and optimisation margins for gas and power, due to exceptional market environment, particularly in
Europe , as well as seasonality. - Signed an agreement in
April 2022 , to acquire Sprng Energy group, one of India’s leading renewable power platforms. - Won bids for 6.5 GW of offshore wind power generation, 5 GW in the
UK with ScottishPower and 1.5 GW in theUSA through the Atlantic Shores joint venture with a 50%Shell share in each. - Completed the
Powershop Australia acquisition and announced the acquisition of 49% of WestWind, a wind farm developer with a 3 GW project pipeline. - Started production of green hydrogen at a 20 MW electrolyser in
China , supplying fuel cell vehicles at the Olympic Games. The start-up increasesShell 's decarbonised hydrogen capacity in operation to 30 MW or 10% of global electrolyser capacity today.
The Renewables and Energy Solutions segment includes Shell’s
CORPORATE
Key data | Q4 2021 | Q1 2022 | Q2 2022 outlook |
Adjusted Earnings ($ million) | (889) | (548) | (650) - (550) |
- The Adjusted Earnings outlook is unchanged with a net expense of
$2,200 - 2,600 million for the full year 2022. This excludes the impact of currency exchange rate effects.
UPCOMING INVESTOR EVENTS
Annual ESG Update | |
Annual General Meeting | |
Second quarter 2022 results and dividends | |
Third quarter 2022 results and dividends |
USEFUL LINKS
Results materials Q1 2022
Quarterly Databook Q1 2022
Dividend announcement Q1 2022
Webcast registration Q1 2022
New reporting segments video
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
This announcement includes certain measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP) such as IFRS, including Adjusted Earnings, Adjusted EBITDA, CFFO excluding working capital movements, Cash capital expenditure, free cash flow, Divestment proceeds and Net debt. This information, along with comparable GAAP measures, is useful to investors because it provides a basis for measuring
This announcement contains a forward-looking Non-GAAP measure for cash capital expenditure. We are unable to provide a reconciliation of this forward-looking Non-GAAP measure to the most comparable GAAP financial measure because certain information needed to reconcile the Non-GAAP measure to the most comparable GAAP financial measure is dependent on future events some of which are outside the control of the company, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are estimated in a manner which is consistent with the accounting policies applied in
CAUTIONARY STATEMENT
All amounts shown throughout this announcement are unaudited. The numbers presented throughout this announcement may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures, due to rounding.
The companies in which
This announcement contains forward-looking statements (within the meaning of the
Shell’s Net Carbon Footprint
Also, in this announcement we may refer to Shell’s “Net Carbon Footprint” or “Net Carbon Intensity”, which include Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell.
Shell’s Net-Zero Emissions Target
Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and Net Carbon Footprint (NCF) targets over the next ten years. However, Shell’s operating plans cannot reflect our 2050 net-zero emissions target and 2035 NCF target, as these targets are currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that
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We may have used certain terms, such as resources, in this announcement that the
The financial information presented in this announcement does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 (“the Act”). Statutory accounts for the year ended
The information in this announcement does not constitute the unaudited condensed consolidated financial statements which are contained in Shell’s first quarter 2022 unaudited results available on www.shell.com/investors.
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