Company Announcements

ROYAL DUTCH SHELL PLC FIRST QUARTER 2021 UNAUDITED RESULTS

Source: OMX
ROYAL DUTCH SHELL PLC FIRST QUARTER 2021 UNAUDITED RESULTS
               
ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS
    

 

                  
 
SUMMARY OF UNAUDITED RESULTS
Quarters$ million 
Q1 2021Q4 2020Q1 2020 Reference
5,660  (4,014) (24) +241Income/(loss) attributable to shareholders 
4,345  (4,478) 2,756  +197CCS earnings attributable to shareholdersNote 2
3,234  393  2,860  +724Adjusted Earnings²A
8,294  6,287  14,851  +32Cash flow from operating activities 
(590) (5,406) (2,718)  Cash flow from investing activities 
7,704  882  12,133   Free cash flowG
3,974  5,503  4,970   Cash capital expenditureC
9,436  9,652  8,618  -2Operating expensesF
8,724  8,544  8,600  +2Underlying operating expensesF
(4.7)%(6.8)%4.6% ROACE (Net income basis)D
3.0%2.9%6.1% ROACE (CCS basis excluding identified items)D
71,252  75,386  74,413   Net debtE
29.9%32.2%28.9% GearingE
3,489  3,371  3,719  +4Total production available for sale (thousand boe/d) 
0.73  (0.52) 0.00+240Basic earnings per share ($) 
0.42  0.05  0.37  +740Adjusted Earnings per share ($)B
0.1735  0.1665  0.16  +4Dividend per share ($) 

1.     Q1 on Q4 change.

2.     Adjusted Earnings is defined as income/(loss) attributable to shareholders plus cost of supplies adjustment (see Note 2) and excluding identified items (see Reference A).


 

First quarter 2021 income attributable to Royal Dutch Shell plc shareholders was $5.7 billion, which included net gains on sale of assets of $1.4 billion and gains of $0.4 billion due to the fair value accounting of commodity derivatives, partly offset by redundancy and restructuring charges of $0.5 billion, mainly related to the restructuring plan named Reshape.


 

Adjusted Earnings for the quarter were $3.2 billion. Cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders for the first quarter 2021 was negative $1.3 billion. The Texas winter storm had an impact on our operations and had an aggregate adverse impact of around $0.2 billion on Adjusted Earnings.


 

Cash flow from operating activities for the first quarter 2021 was $8.3 billion, which included negative working capital movements of $4.4 billion. Cash flow from investing activities for the quarter was an outflow of $0.6 billion, driven mainly by capital expenditure and partly offset by proceeds from sale of property, plant and equipment and businesses.


 

Compared with the fourth quarter 2020, current quarter Adjusted Earnings reflected higher realised oil and LNG prices, chemicals and refining margins, Oil Products trading contributions and lower depreciation.


 

Compared with the first quarter 2020, current quarter Adjusted Earnings reflected higher realised oil prices and chemicals margins partly offset by lower realised refining and marketing margins.


 

At the end of the first quarter 2021, net debt was $71.3 billion, compared with $75.4 billion at the end of the fourth quarter 2020, mainly driven by free cash flow generation in the quarter. Gearing was 29.9% at the end of the first quarter 2021, compared with 32.2% at the end of the fourth quarter 2020, mainly driven by net debt reduction, earnings and remeasurements of pensions.


 

Dividends declared to Royal Dutch Shell plc shareholders for the quarter amount to $0.1735 per share, an increase of around 4% from the last quarter.


 

With effect from the first quarter 2021, business performance analysis of the current quarter compared with the previous quarter is introduced, which will replace, starting from the second quarter 2021, business performance






 



   
 
ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


analysis compared with the same quarter of the previous year. This change is introduced to enable better understanding of our business performance sequentially from quarter to quarter.


 

Supplementary financial and operational disclosure and a separate press release for this quarter are available at www.shell.com/investors1. With effect from the first quarter 2021, new disclosures are included in these supplementary financial and operational disclosures to improve understanding of our businesses. See Reference J for reconciliations of new Additional Performance (Non-GAAP) Measures introduced in these disclosures.


 

1. Not incorporated by reference.

 

FIRST QUARTER 2021 PORTFOLIO DEVELOPMENTS

 

Integrated Gas

In March 2021, QGC Common Facilities Company Pty Ltd, a wholly-owned subsidiary of Shell, completed the sale of a 26.25% interest in the Queensland Curtis LNG (QCLNG) Common Facilities to Global Infrastructure Partners Australia for $2.5 billion, following the receipt of regulatory approval.

 

Upstream

In January 2021, Shell completed the sale of its 30% interest in Oil Mining Lease 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil and Gas Limited, a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc, for a consideration of $533 million. A total of $453 million was paid by completion with the balance to be paid over an agreed period.


 

In February 2021, an agreement was reached with publicly listed Canadian energy company Crescent Point Energy Corp. to sell the Duvernay shale light oil position in Alberta, Canada. The transaction completed on April 1, 2021. The consideration received consisted of $533 million in cash and 50 million shares in Crescent Point Energy common stock (TSX: CPG) valued at $208 million based on the closing price on March 31, 2021.


 

In March 2021, Shell Egypt and one of its affiliates signed an agreement with a consortium made up of subsidiaries of Cheiron Petroleum Corporation and Cairn Energy plc to acquire Shell’s upstream assets in Egypt’s Western Desert for a base consideration of $646 million and additional payments of up to $280 million between 2021 and 2024, contingent on the oil price and the results of further exploration. The transaction is subject to government and regulatory approvals and is expected to complete in the second half of 2021.


 



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PERFORMANCE BY SEGMENT

 

               
 
INTEGRATED GAS
Quarters$ million
Q1 2021Q4 2020Q1 2020 
2,527  20  1,812  +12,638Segment earnings
1,112  (1,089) (331)  Of which: Identified items (Reference A)
1,415  1,109  2,143  +28Adjusted Earnings
2,491  2,203  3,986  +13Cash flow from operating activities
3,653  2,195  3,352  +66Cash flow from operating activities excluding working capital movements (Reference H)
1,015  1,664  882   Cash capital expenditure (Reference C)
170  156  162  +9Liquids production available for sale (thousand b/d)
4,621  4,555  4,596  +1Natural gas production available for sale (million scf/d)
967  942  955  +3Total production available for sale (thousand boe/d)
8.16  8.21  8.88  -1LNG liquefaction volumes (million tonnes)
15.80  16.89  19.00  -6LNG sales volumes (million tonnes)

1.     Q1 on Q4 change.


 

First quarter segment earnings were $2,527 million. This included gains on sale of assets of $997 million and gains of $263 million due to the fair value accounting of commodity derivatives. These gains are part of identified items (see Reference A). Adjusted Earnings for the quarter were $1,415 million. Net financial impact from the Texas winter storm was limited as positive trading margins were offset by higher operating expenses ($0.4 billion post-tax) related to provisions for counterparty credit risk.

Cash flow from operating activities for the quarter was $2,491 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, as well as favourable commodity derivatives impacts of $867 million. This was partly offset by negative working capital movements of $1,162 million.


 

Compared with the fourth quarter 2020, Integrated Gas Adjusted Earnings primarily reflected higher realised prices for oil and LNG, partly offset by higher operating expenses related to credit provisions.

Compared with the fourth quarter 2020, total oil and gas production increased by 3% mainly due to the restart of production at the Prelude floating LNG operations in Australia. LNG liquefaction volumes decreased by 1% due to cargo timing, partly offset by the restart of production at the Prelude floating LNG operations in Australia.

Compared with the first quarter 2020, Integrated Gas Adjusted Earnings primarily reflected higher operating expenses related to credit provisions, lower contributions from marketing and trading and favourable deferred tax movements in the first quarter 2020.


 

Compared with the first quarter 2020, total oil and gas production increased by 1% mainly due to new fields and lower maintenance. LNG liquefaction volumes decreased by 8% mainly as a result of feedgas constraints and maintenance activities, partly offset by higher production at the Prelude floating LNG operations in Australia.



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UPSTREAM 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
1,096  (2,091) (863) +152Segment earnings
133  (1,344) (1,154)  Of which: Identified items (Reference A)
963  (748) 291  +229Adjusted Earnings
4,108  2,010  5,607  +104Cash flow from operating activities
4,702  2,890  3,718  +63Cash flow from operating activities excluding working capital movements (Reference H)
1,534  1,654  2,521   Cash capital expenditure (Reference C)
1,579  1,537  1,730  +3Liquids production available for sale (thousand b/d)
5,126  4,837  5,680  +6Natural gas production available for sale (million scf/d)
2,462  2,371  2,710  +4Total production available for sale (thousand boe/d)

1.    Q1 on Q4 change.


 

First quarter segment earnings were $1,096 million. This included a net gain of $411 million related to the sale of assets, and a charge of $232 million related to the impact of the weakening Brazilian real on a deferred tax position. These net gains are part of identified items (see Reference A). Adjusted Earnings were $963 million.

Cash flow from operating activities for the quarter was $4,108 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation.


 

Compared with the fourth quarter 2020, Upstream Adjusted Earnings reflected higher realised oil prices, lower depreciation, and the absence of the unfavourable deferred tax movements which impacted the fourth quarter 2020. These were partly offset by comparative adverse currency effects.


 

Compared with the fourth quarter 2020, total production increased by 4%, mainly due to favourable gas seasonal effects and the impact of hurricanes in the US Gulf of Mexico in the fourth quarter 2020.


 

Compared with the first quarter 2020, Upstream Adjusted Earnings reflected higher realised oil prices, and lower depreciation.


 

Compared with the first quarter 2020, total production decreased by 9%, mainly due to the impact of higher maintenance and divestments. The impact of field declines was largely offset by growth from new fields.


 



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OIL PRODUCTS
Quarters$ million
Q1 2021Q4 2020Q1 2020 
650  (1,775) 2,211  +137Segment earnings²
(227) (2,315) 849  
 
Of which: Identified items (Reference A)
877  540  1,363  +62Adjusted Earnings²
    Of which:
(105) (287) 158  +63Refining & Trading³
982  828  1,205  +19Marketing³
893  1,198  4,878  -25Cash flow from operating activities
3,313  782  353  +324Cash flow from operating activities excluding working capital movements (Reference H)
668  1,310  580   Cash capital expenditure (Reference C)
1,751  1,940  2,397  -10Refinery processing intake (thousand b/d)
4,164  4,781  5,278  -13Oil Products sales volumes (thousand b/d)

1.    Q1 on Q4 change.

2.    Earnings are presented on a CCS basis (see Note 2).

3.    As of Q1 2021, changes in the cost and activity allocation between Marketing and Refining & Trading resulted in a net charge of $170 million to Refining & Trading, with an offsetting amount in Marketing. This change does not impact consolidated Oil Products Adjusted Earnings.


 


 

First quarter segment earnings were $650 million. This included redundancy and restructuring costs of $284 million, which are part of identified items (see Reference A). Adjusted Earnings were $877 million.

Cash flow from operating activities for the first quarter 2021 was $893 million, primarily driven by Adjusted Earnings before depreciation and by cost-of-sales adjustments, partly offset by negative working capital movements of $2,420 million, and cash outflows for commodity derivatives of $200 million.


 

Compared with the fourth quarter 2020, Oil Products Adjusted Earnings reflected higher contributions from trading and optimisation, higher realised refining margins, and lower operating expenses. These were partly offset by the absence of the favourable deferred tax movements in the fourth quarter 2020.


 

Oil Products sales volumes decreased due to the impact of further lockdowns arising from COVID-19, and the Texas winter storm, compared with the fourth quarter 2020.


 

▪Refining & Trading Adjusted Earnings reflected higher realised refining margins, and higher contributions from trading and optimisation. These were partly offset by the absence of the favourable deferred tax movements in the fourth quarter 2020.

▪Marketing Adjusted Earnings reflected lower operating expenses.


 

Refinery utilisation remained at 72% compared with the fourth quarter 2020, with the impact of the Texas winter storm in the first quarter 2021, offset by the comparative effect of the Convent Refinery shutdown in the fourth quarter 2020.


 

Compared with the first quarter 2020, Oil Products Adjusted Earnings reflected lower realised refining and marketing margins due to a weaker macroeconomic environment and the COVID-19 pandemic.


 

Refining & Trading Adjusted Earnings reflected lower realised refining margins, partly offset by lower depreciation.

Marketing Adjusted Earnings reflected lower margins.

Refinery utilisation was 72% compared with 81% in the first quarter 2020, mainly due to lower demand and economic optimisation of the plants, as well as the impact of the Texas winter storm.


 



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CHEMICALS
Quarters$ million
Q1 2021Q4 2020Q1 2020 
689  367  146  +88Segment earnings²
(41) (14) (2)  Of which: Identified items (Reference A)
730  381  148  +92Adjusted Earnings²
324  774  (178) -58Cash flow from operating activities
1,045  775  189  +35Cash flow from operating activities excluding working capital movements (Reference H)
730  830  846   Cash capital expenditure (Reference C)
3,583  3,718  3,871  -4Chemicals sales volumes (thousand tonnes)

1.    Q1 on Q4 change.

2.    Earnings are presented on a CCS basis (see Note 2).


 

First quarter segment earnings were $689 million.

Cash flow from operating activities for the quarter was $324 million, primarily driven by Adjusted Earnings before depreciation as well as negative working capital movements of $721 million.


 

Compared with the fourth quarter 2020, Chemicals Adjusted Earnings reflected higher realised margins in base chemicals and intermediates from a stronger price environment.


 

Chemicals manufacturing plant utilisation remained at 79% compared with the fourth quarter 2020, with the impact of the Texas winter storm at the Deer Park site offsetting comparatively fewer maintenance activities.


 

Compared with the first quarter 2020, Chemicals Adjusted Earnings reflected higher realised margins in base chemicals and intermediates from a stronger price environment.


 

Chemicals manufacturing plant utilisation was 79% compared with 84% in the first quarter 2020, mainly due to the Texas winter storm.


 

 

            
 
CORPORATE
Quarters$ million
Q1 2021Q4 2020Q1 2020 
(531) (954) (453) Segment earnings
134  (118) 535  Of which: Identified items (Reference A)
(666) (836) (989) Adjusted Earnings
478  102  559  Cash flow from operating activities
(30) (17) (239) Cash flow from operating activities excluding working capital movements (Reference H)

First quarter segment earnings were an expense of $531 million. This included a gain of $134 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 for the quarter were an expense of $666 million.

Compared with the fourth quarter 2020, Adjusted Earnings reflected a favourable movement in tax credits partly offset by adverse currency exchange rate effects.

Compared with the first quarter 2020, Adjusted Earnings reflected favourable currency exchange rate effects and lower net interest expense.

 

OUTLOOK FOR THE SECOND QUARTER 2021

As a result of the COVID-19 pandemic, there continues to be significant uncertainty in the macroeconomic conditions with an expected negative impact on demand for oil, gas and related products. The second quarter 2021 outlook provides ranges for operational and financial metrics based on current expectations, but these are subject to change in the light of evolving market conditions. Due to demand or regulatory requirements and/or constraints in infrastructure, Shell may need



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to take measures to curtail or reduce oil and/or gas production, LNG liquefaction as well as utilisation of refining and chemicals plants and similarly sales volumes could be impacted. Such measures will likely have a variety of impacts on our operational and financial metrics.

 

Integrated Gas production is expected to be approximately 880 - 940 thousand boe/d. LNG liquefaction volumes are expected to be approximately 7.6 - 8.2 million tonnes.

 

Upstream production is expected to be approximately 2,150 - 2,350 thousand boe/d, reflecting lower seasonal gas demand and divestment impacts.

 

Refinery utilisation is expected to be approximately 73% - 81%.

Oil Products sales volumes are expected to be approximately 4,000 - 5,000 thousand b/d.

 

Chemicals manufacturing plant utilisation is expected to be approximately 76% - 84%.

Chemicals sales volumes are expected to be approximately 3,500 - 3,800 thousand tonnes.

 

Corporate Adjusted Earnings are expected to be a net expense of approximately $600 - $700 million in the second quarter 2021 and a net expense of approximately $2,400 - $2,800 million for the full year 2021. This excludes the impact of currency exchange rate effects.

 


 



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ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

            
 
CONSOLIDATED STATEMENT OF INCOME
Quarters$ million
Q1 2021Q4 2020Q1 2020 
55,665  43,989  60,029  Revenue¹
995  629  854  Share of profit of joint ventures and associates
2,455  411  76  Interest and other income²
59,115  45,028  60,959  Total revenue and other income
34,369  28,511  43,213  Purchases
6,808  6,701  5,982  Production and manufacturing expenses
2,462  2,751  2,393  Selling, distribution and administrative expenses
166  199  243  Research and development
285  508  294  Exploration
5,896  9,573  7,093  Depreciation, depletion and amortisation²
892  908  1,118  Interest expense
50,878  49,152  60,336  Total expenditure
8,237  (4,124) 623  Income/(loss) before taxation
2,453  (168) 646  Taxation charge/(credit)
5,784  (3,956) (23) Income/(loss) for the period¹
124  58   Income/(loss) attributable to non-controlling interest
5,660  (4,014) (24) Income/(loss) attributable to Royal Dutch Shell plc shareholders
0.73  (0.52) 0.00  Basic earnings per share ($)³
0.72  (0.52) 0.00  Diluted earnings per share ($)³

1.    See Note 2 “Segment information”.

2.    See Note 7 “Other notes to the Condensed Consolidated Interim Financial Statements”.

3.    See Note 3 “Earnings per share”.

 

            
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarters$ million
Q1 2021Q4 2020Q1 2020 
5,784  (3,956) (23) Income/(loss) for the period
   Other comprehensive income/(loss) net of tax:
   Items that may be reclassified to income in later periods:
(852) 2,280  (3,935) – Currency translation differences
(14)  (28) – Debt instruments remeasurements
132  54  (152) – Cash flow hedging gains/(losses)
171  (170) —  – Net investment hedging gains/(losses)
(34)  101  – Deferred cost of hedging
(56) 39  (60) – Share of other comprehensive income/(loss) of joint ventures and associates
(652) 2,208  (4,074) Total
   Items that are not reclassified to income in later periods:
4,628  1,045  1,756  – Retirement benefits remeasurements
40  88  (137) – Equity instruments remeasurements
(25)  48  – Share of other comprehensive income/(loss) of joint ventures and associates
4,643  1,140  1,667  Total
3,991  3,347  (2,407) Other comprehensive income/(loss) for the period
9,775  (609) (2,430) Comprehensive income/(loss) for the period
121  134  (123) Comprehensive income/(loss) attributable to non-controlling interest
9,653  (743) (2,307) Comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders



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CONDENSED CONSOLIDATED BALANCE SHEET
$ million  
 March 31, 2021December 31, 2020
Assets  
Non-current assets  
Intangible assets22,872  22,822  
Property, plant and equipment208,298  210,847  
Joint ventures and associates22,537  22,451  
Investments in securities3,341  3,222  
Deferred tax13,871  16,311  
Retirement benefits¹5,845  2,474  
Trade and other receivables7,396  7,641  
Derivative financial instruments²1,681  2,805  
 285,841  288,573  
Current assets  
Inventories22,680  19,457  
Trade and other receivables40,142  33,625  
Derivative financial instruments²5,752  5,783  
Cash and cash equivalents30,985  31,830  
 99,559  90,695  
Total assets385,400  379,268  
Liabilities  
Non-current liabilities  
Debt87,828  91,115  
Trade and other payables2,670  2,304  
Derivative financial instruments²554  420  
Deferred tax11,285  10,463  
Retirement benefits1,312,348  15,605  
Decommissioning and other provisions27,330  27,310  
 142,016  147,217  
Current liabilities  
Debt14,541  16,899  
Trade and other payables³49,456  44,572  
Derivative financial instruments²5,260  5,308  
Income taxes payable³3,372  3,111  
Decommissioning and other provisions3,802  3,624  
 76,431  73,514  
Total liabilities218,447  220,731  
Equity attributable to Royal Dutch Shell plc shareholders163,714  155,310  
Non-controlling interest3,239  3,227  
Total equity166,953  158,537  
Total liabilities and equity385,400  379,268  

1.    See Note 7 "Other notes to the Condensed Consolidated Interim Financial Statements".

2.    See Note 6 “Derivative financial instruments and debt excluding lease liabilities”.

3. As from January 1, 2021 the 'Retirement benefits' liability has been classified under non-current liabilities (previously partly presented within current liabilities) and taxes payable not related to income tax are presented within 'Trade and other payables' (previously 'Taxes payable'). Prior period comparatives have been revised to conform with current year presentation. See Note 7.


 


 


 



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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
 Equity attributable to Royal Dutch Shell plc shareholders  
$ millionShare capital¹Shares held in trustOther reserves²Retained earningsTotalNon-controlling interestTotal equity
At January 1, 2021651  (709) 12,752  142,616  155,310  3,227  158,537  
Comprehensive income/(loss) for the period—  —  3,994  5,660  9,653  121  9,775  
Dividends³—  —  —  (1,289) (1,289) (125) (1,414) 
Share-based compensation—  356  (371) 55  41  —  41  
Other changes in non-controlling interest—  —  —  (1) (1) 15  15  
At March 31, 2021651  (352) 16,375  147,041  163,714  3,239  166,953  
At January 1, 2020657  (1,063) 14,451  172,431  186,476  3,987  190,463  
Comprehensive income/(loss) for the period—  —  (2,283) (24) (2,307) (123) (2,430) 
Transfer from other comprehensive income—  —  (6)  —  —  —  
Dividends3—  —  —  (3,482) (3,482) (110) (3,591) 
Repurchases of shares(5) —   (1,006) (1,006) —  (1,006) 
Share-based compensation—  585  (374) (253) (43) —  (43) 
Other changes in non-controlling interest—  —  —    (14) (14) 
At March 31, 2020652  (479) 11,794  167,672  179,639  3,740  183,379  

1.    See Note 4 “Share capital”.

2.    See Note 5 “Other reserves”.

3.    The amount charged to retained earnings is based on prevailing exchange rates on payment date.



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CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters$ million
Q1 2021Q4 2020Q1 2020 
8,237  (4,124) 623  Income before taxation for the period
   Adjustment for:
757  716  897  – Interest expense (net)
5,896  9,573  7,093  – Depreciation, depletion and amortisation
136  199  83  – Exploration well write-offs
(2,073) (162) 106  – Net (gains)/losses on sale and revaluation of non-current assets and businesses
(995) (629) (854) – Share of (profit)/loss of joint ventures and associates
580  982  531  – Dividends received from joint ventures and associates
(3,426) (1,809) 9,594  – (Increase)/decrease in inventories
(6,829) (107) 6,314  – (Increase)/decrease in current receivables
5,865  1,579  (8,430) – Increase/(decrease) in current payables
185  78  (171) – Derivative financial instruments
109  212  (91) – Retirement benefits
77  771  (102) – Decommissioning and other provisions
583  (355) 579  – Other
(809) (638) (1,321) Tax paid
8,294  6,287  14,851  Cash flow from operating activities
(3,885) (5,206) (4,263) Capital expenditure
(69) (269) (559) Investments in joint ventures and associates
(21) (28) (147) Investments in equity securities
3,106  94  1,613  Proceeds from sale of property, plant and equipment and businesses
275  111  547  Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans²
31   73  Proceeds from sale of equity securities
98  111  192  Interest received
711  622  855  Other investing cash inflows
(837) (848) (1,028) Other investing cash outflows
(590) (5,406) (2,718) Cash flow from investing activities
113  (299) 321  Net increase/(decrease) in debt with maturity period within three months
   Other debt:
109  2,048  1,003  – New borrowings
(5,707) (4,862) (2,723) – Repayments
(806) (1,153) (1,033) Interest paid
(449) 495  (81) Derivative financial instruments
15  (2) (8) Change in non-controlling interest
   Cash dividends paid to:
(1,292) (1,307) (3,483) – Royal Dutch Shell plc shareholders¹
(125) (69) (110) – Non-controlling interest
(216) —  (1,486) Repurchases of shares3
(63) (184) (182) Shares held in trust: net sales/(purchases) and dividends received
(8,420) (5,333) (7,781) Cash flow from financing activities
(128) 567  (595) Effects of exchange rate changes on cash and cash equivalents
(844) (3,884) 3,756  Increase/(decrease) in cash and cash equivalents
31,830  35,714  18,055  Cash and cash equivalents at beginning of period
30,985  31,830  21,811  Cash and cash equivalents at end of period

1.     Cash dividends paid represents the payment of net dividends (after deduction of withholding taxes where applicable) and payment of withholding taxes on dividends paid in the previous quarter.

2. As from 2021 renamed from 'Proceeds from sale of joint ventures and associates'.

3. The amount in Q1 2021 represents a payment of withholding taxes related to repurchases of shares in Q1 2020.



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ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

1. Basis of preparation

These unaudited Condensed Consolidated Interim Financial Statements ("Interim Statements") of Royal Dutch Shell plc (“the Company”) and its subsidiaries (collectively referred to as “Shell”) have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board ("IASB") and as adopted by the UK. For periods beginning on or after January 1, 2021, Shell's (interim) financial statements are prepared in accordance with UK-adopted international accounting standards which were established as a result of the UK's exit from the European Union. As applied to Shell there are no material differences from International Financial Reporting Standards as issued by the IASB. Except for the application of UK-adopted international accounting standards these Interim Statements have been prepared on the basis of the same accounting principles as those used in the Annual Report and Accounts (pages 216 to 264) and Form 20-F (pages 164 to 211) for the year ended December 31, 2020 as filed with the Registrar of Companies for England and Wales and the US Securities and Exchange Commission, respectively, and should be read in conjunction with these filings.

The financial information presented in the unaudited Interim Statements 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 December 31, 2020 were published in Shell’s Annual Report and Accounts, a copy of which was delivered to the Registrar of Companies for England and Wales, and in Shell's Form 20-F. The auditor’s report on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or 498(3) of the Act.

Key accounting considerations, significant judgements and estimates

Future commodity price assumptions and management's view on the future development of refining margins represent a significant estimate and both were subject to change in 2020, resulting in the recognition of impairments in 2020. These assumptions continue to apply for impairment testing purposes in the first quarter 2021.


 


 

 

2. Segment information

Segment earnings are presented on a current cost of supplies basis (CCS earnings), which is the earnings measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance. On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude the effect of changes in the oil price on inventory carrying amounts. Sales between segments are based on prices generally equivalent to commercially available prices.



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ROYAL DUTCH SHELL PLC
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INFORMATION BY SEGMENT
Quarters$ million
Q1 2021Q4 2020Q1 2020 
   Third-party revenue
11,258  8,010  10,157  Integrated Gas
1,941  1,576  2,344  Upstream
38,382  31,001  44,297  Oil Products
4,070  3,386  3,221  Chemicals
14  16  11  Corporate
55,665  43,989  60,029  Total third-party revenue¹
   Inter-segment revenue
1,351  1,098  891  Integrated Gas
7,254  5,860  6,476  Upstream
2,457  1,733  1,851  Oil Products
1,187  784  875  Chemicals
—  —  —  Corporate
   CCS earnings
2,527  20  1,812  Integrated Gas
1,096  (2,091) (863) Upstream
650  (1,775) 2,211  Oil Products
689  367  146  Chemicals
(531) (954) (453) Corporate
4,430  (4,434) 2,854  Total CCS earnings

1.    Includes revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. First quarter 2021 included income of $1,211 million (Q4 2020: $114 million income; Q1 2020: $6,686 million income). This amount includes both the reversal of prior losses of $385 million (Q4 2020: $147 million gains; Q1 2020: $317 million gains) related to sales contracts and prior gains of $465 million (Q4 2020: $23 million gains; Q1 2020: $76 million losses) related to purchase contracts that were previously recognised and where physical settlement took place in the first quarter 2021.

            
 
RECONCILIATION OF INCOME FOR THE PERIOD TO CCS EARNINGS
Quarters$ million
Q1 2021Q4 2020Q1 2020 
5,660  (4,014) (24) Income/(loss) attributable to Royal Dutch Shell plc shareholders
124  58   Income/(loss) attributable to non-controlling interest
5,784  (3,956) (23) Income/(loss) for the period
   Current cost of supplies adjustment:
(1,631) (589) 3,774  Purchases
353  133  (916) Taxation
(76) (23) 19  Share of profit/(loss) of joint ventures and associates
(1,354) (479) 2,876  Current cost of supplies adjustment
   of which:
(1,314) (465) 2,780  Attributable to Royal Dutch Shell plc shareholders
(39) (14) 96Attributable to non-controlling interest
4,430  (4,434) 2,854  CCS earnings
   of which:
4,345  (4,478) 2,756  CCS earnings attributable to Royal Dutch Shell plc shareholders
85  44  97  CCS earnings attributable to non-controlling interest


 


 



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ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


3. Earnings per share

            
 
EARNINGS PER SHARE
Quarters 
Q1 2021Q4 2020Q1 2020 
5,660  (4,014) (24) Income/(loss) attributable to Royal Dutch Shell plc shareholders ($ million)
    
   Weighted average number of shares used as the basis for determining:
7,782.1  7,784.4  7,819.8  Basic earnings per share (million)
7,832.3  7,784.4  7,819.8  Diluted earnings per share (million)

 

4. Share capital

                  
 
ISSUED AND FULLY PAID ORDINARY SHARES OF €0.07 EACH1
 Number of sharesNominal value ($ million)
 ABABTotal
At January 1, 20214,101,239,499  3,706,183,836  345306651
At March 31, 20214,101,239,499  3,706,183,836  345306651
At January 1, 20204,151,787,517  3,729,407,107  349308657
Repurchases of shares(46,143,892) (15,422,859) (4)(1)(5)
At March 31, 20204,105,643,625  3,713,984,248  345307652

1.    Share capital at March 31, 2021 also included 50,000 issued and fully paid sterling deferred shares of £1 each.

At Royal Dutch Shell plc’s Annual General Meeting on May 19, 2020, the Board was authorised to allot ordinary shares in Royal Dutch Shell plc, and to grant rights to subscribe for, or to convert, any security into ordinary shares in Royal Dutch Shell plc, up to an aggregate nominal amount of €182.7 million (representing 2,611 million ordinary shares of €0.07 each), and to list such shares or rights on any stock exchange. This authority expires at the earlier of the close of business on August 19, 2021, and the end of the Annual General Meeting to be held in 2021, unless previously renewed, revoked or varied by Royal Dutch Shell plc in a general meeting.

 

5. Other reserves

                     
 
OTHER RESERVES
$ millionMerger reserveShare premium reserveCapital redemption reserveShare plan reserveAccumulated other comprehensive incomeTotal
At January 1, 202137,298  154  129  906  (25,735) 12,752  
Other comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders—  —  —  —  3,994  3,994  
Share-based compensation—  —  —  (371) —  (371) 
At March 31, 202137,298  154  129  535  (21,742) 16,375  
At January 1, 202037,298  154  123  1,049  (24,173) 14,451  
Other comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders—  —  —  —  (2,283) (2,283) 
Transfer from other comprehensive income—  —  —  —  (6) (6) 
Repurchases of shares—  —   —  —   
Share-based compensation—  —  —  (374) —  (374) 
At March 31, 202037,298  154  128  675  (26,462) 11,794  



         Page 14



   
 
ROYAL DUTCH SHELL PLC
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The merger reserve and share premium reserve were established as a consequence of Royal Dutch Shell plc becoming the single parent company of Royal Dutch Petroleum Company and The “Shell” Transport and Trading Company, p.l.c., now The Shell Transport and Trading Company Limited, in 2005. The merger reserve increased in 2016 following the issuance of shares for the acquisition of BG Group plc. The capital redemption reserve was established in connection with repurchases of shares of Royal Dutch Shell plc. The share plan reserve is in respect of equity-settled share-based compensation plans.

 

6. Derivative financial instruments and debt excluding lease liabilities

As disclosed in the Consolidated Financial Statements for the year ended December 31, 2020, presented in the Annual Report and Accounts and Form 20-F for that year, Shell is exposed to the risks of changes in fair value of its financial assets and liabilities. The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values at March 31, 2021, are consistent with those used in the year ended December 31, 2020, though the carrying amounts of derivative financial instruments measured using predominantly unobservable inputs have changed since that date.

The table below provides the comparison of the fair value with the carrying amount of debt excluding lease liabilities, disclosed in accordance with IFRS 7 Financial Instruments: Disclosures.

         
 
DEBT EXCLUDING LEASE LIABILITIES
$ millionMarch 31, 2021December 31, 2020
Carrying amount74,192  79,594  
Fair value¹79,603  88,294  

1.    Mainly determined from the prices quoted for these securities.


 

 


 

7. Other notes to the unaudited Condensed Consolidated Interim Financial Statements

Consolidated Statement of Income

Interest and other income

            
 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
2,455  411  76  Interest and other income
   of which:
134  168  199  Interest income
   Dividend income (from investments in equity securities)
2,073  162  (106) Net gains on sales and revaluation of non-current assets and businesses
85  (35) (82) Net foreign exchange (losses)/gains on financing activities
161  113  63  Other


 

Depreciation, depletion and amortisation

            
 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
5,896  9,573  7,093  Depreciation, depletion and amortisation

Depreciation, depletion and amortisation in Q1 2021 includes $84 million of impairments (Q4 2020: $3,318 million; Q1 2020: $749 million).


 


 


 


 



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ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


Condensed Consolidated Balance Sheet

Retirement benefits

         
 
$ million  
 March 31, 2021December 31, 2020
Non-current assets  
Retirement benefits5,845  2,474  
Non-current liabilities  
Retirement benefits¹12,348  15,605  
Deficit6,503  13,131  

1.As from January 1, 2021 the 'Retirement benefits' liability has been classified under non-current liabilities (previously partly presented within current liabilities). Prior period comparatives have been revised by $437 million to conform with current year presentation.

The decrease in the net retirement benefit liability is mainly driven by an increase of the market yield on high-quality corporate bonds in the US, the UK and Eurozone, partly offset by an increase in expected inflation in the UK and Eurozone. Amounts recognised in the balance sheet in relation to defined benefit plans include both plan assets and obligations that are presented on a net basis on a plan-by-plan basis.


 

Income taxes payable

         
 
$ million  
 March 31, 2021December 31, 2020
Income taxes payable3,372  3,111  


 

As from January 1, 2021 taxes payable not related to income tax are presented within 'Trade and other payables' (previously within 'Taxes payable') and 'Taxes payable' has been renamed into 'Income taxes payable'. Prior period comparatives have been revised by $2,895 million to conform with current year presentation.


 

 

8. Post-Balance Sheet Events

In February 2021, an agreement was reached with publicly listed Canadian energy company Crescent Point Energy Corp. to sell the Duvernay shale light oil position in Alberta, Canada. The transaction completed on April 1, 2021. The consideration received was comprised of $533 million in cash and 50 million shares in Crescent Point Energy common stock (TSX: CPG) valued at $208 million based on the closing price on March 31, 2021.


 



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ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES

A.Adjusted Earnings

The “Adjusted Earnings” measure aims to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items. These items are in some cases driven by external factors and may, either individually or collectively, hinder the comparative understanding of Shell’s financial results from period to period. This measure excludes earnings attributable to non-controlling interest.

            
 
ADJUSTED EARNINGS
Quarters$ million
Q1 2021Q4 2020Q1 2020 
5,660  (4,014) (24) Income/(loss) attributable to Royal Dutch Shell plc shareholders
(1,314) (465) 2,780  Add: Current cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders (Note 2)
1,112  (4,871) (104) Less: Identified items attributable to Royal Dutch Shell plc shareholders
3,234  393  2,860  Adjusted Earnings

Identified items

Identified items comprise: divestment gains and losses, impairments, redundancy and restructuring, provisions for onerous contracts, fair value accounting of commodity derivatives and certain gas contracts and the impact of exchange rate movements on certain deferred tax balances, and other items.

            
 
IDENTIFIED ITEMS
Quarters$ million
Q1 2021Q4 2020Q1 2020 
   Identified items before tax
2,073  162  (76) Divestment gains/(losses)
(84) (3,344) (749) Impairments
(748) (372) (18) Redundancy and restructuring
—  (1,259) —  Provisions for onerous contracts
388  (957) 968  Fair value accounting of commodity derivatives and certain gas contracts
31  (145) —  Other
1,661  (5,914) 125  Total identified items before tax
(549) 1,033  (228) Total tax impact of identified items
   Identified items after tax
1,410  (20) (32) Divestment gains/(losses)
(94) (2,746) (536) Impairments
(486) (267) (7) Redundancy and restructuring
—  (994) —  Provisions for onerous contracts
365  (864) 838  Fair value accounting of commodity derivatives and certain gas contracts
(110) 157  (366) Impact of exchange rate movements on tax balances
25  (147) —  Other
1,112  (4,881) (104) Impact on CCS earnings
   Of which:
1,112  (1,089) (331) Integrated Gas
133  (1,344) (1,154) Upstream
(227) (2,315) 849  Oil Products
(41) (14) (2) Chemicals
134  (118) 535  Corporate
1,112  (4,871) (104) Impact on CCS earnings attributable to shareholders
—  (10) —  Impact on CCS earnings attributable to non-controlling interest


 



         Page 17



   
 
ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


The identified items categories above may include after-tax impacts of identified items of joint ventures and associates which are fully reported within "Share of profit of joint ventures and associates" in the Consolidated Statement of Income, and fully reported as identified items before tax in the table above. Identified items related to subsidiaries are consolidated and reported across appropriate lines of the Consolidated Statement of Income. Only pre-tax identified items reported by subsidiaries are taken into account in the calculation of underlying operating expenses (Reference F).


 

Provisions for onerous contracts: Provisions for onerous contracts that relate to businesses that Shell has exited or to redundant assets or assets that cannot be used.

Fair value accounting of commodity derivatives and certain gas contracts: In the ordinary course of business, Shell enters into contracts to supply or purchase oil and gas products, as well as power and environmental products. Shell also enters into contracts for tolling, pipeline and storage capacity. Derivative contracts are entered into for mitigation of resulting economic exposures (generally price exposure) and these derivative contracts are carried at period-end market price (fair value), with movements in fair value recognised in income for the period. Supply and purchase contracts entered into for operational purposes, as well as contracts for tolling, pipeline and storage capacity, are, by contrast, recognised when the transaction occurs; furthermore, inventory is carried at historical cost or net realisable value, whichever is lower. As a consequence, accounting mismatches occur because: (a) the supply or purchase transaction is recognised in a different period, or (b) the inventory is measured on a different basis. In addition, certain contracts are, due to pricing or delivery conditions, deemed to contain embedded derivatives or written options and are also required to be carried at fair value even though they are entered into for operational purposes. The accounting impacts are reported as identified items.

Impacts of exchange rate movements on tax balances represent the impact on tax balances of exchange rate movements arising on (a) the conversion to dollars of the local currency tax base of non-monetary assets and liabilities, as well as losses (this primarily impacts the Upstream and Integrated Gas segments) and (b) the conversion of dollar-denominated inter-segment loans to local currency, leading to taxable exchange rate gains or losses (this primarily impacts the Corporate segment).

Other identified items represent other credits or charges that based on Shell management's assessment hinder the comparative understanding of Shell's financial results from period to period.

B.    Adjusted Earnings per share

Adjusted Earnings per share is calculated as Adjusted Earnings (see Reference A), divided by the weighted average number of shares used as the basis for basic earnings per share (see Note 3).

C.    Cash capital expenditure

Cash capital expenditure represents cash spent on maintaining and developing assets as well as on investments in the period. Management regularly monitors this measure as a key lever to delivering sustainable cash flows. Cash capital expenditure is the sum of the following lines from the Consolidated Statement of Cash flows: Capital expenditure, Investments in joint ventures and associates and Investments in equity securities.

            
 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
3,885  5,206  4,263  Capital expenditure
69  269  559  Investments in joint ventures and associates
21  28  147  Investments in equity securities
3,974  5,503  4,970  Cash capital expenditure
   Of which:
1,015  1,664  882  Integrated Gas
1,534  1,654  2,521  Upstream
668  1,310  580  Oil Products
730  830  846  Chemicals
28  46  141  Corporate


 



         Page 18



   
 
ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


D.    Return on average capital employed


 

Return on average capital employed ("ROACE") measures the efficiency of Shell’s utilisation of the capital that it employs. Shell uses two ROACE measures: ROACE on a Net income basis and ROACE on a CCS basis excluding identified items, both adjusted for after-tax interest expense. With effect from the second quarter 2020, the after-tax interest expense adjustment is calculated using an applicable blended statutory tax rate. This change is implemented to eliminate the distorting volatility effects of the effective tax rate. There is no significant impact on prior periods comparatives, which therefore have not been revised.

Both measures refer to Capital employed which consists of total equity, current debt and non-current debt.

ROACE on a Net income basis

In this calculation, the sum of income for the current and previous three quarters, adjusted for after-tax interest expense, is expressed as a percentage of the average capital employed for the same period.

            
 
$ millionQuarters
 Q1 2021Q4 2020Q1 2020
Income - current and previous three quarters(15,727)(21,534)10,252
Interest expense after tax - current and previous three quarters2,7282,8222,854
Income before interest expense - current and previous three quarters(12,999)(18,712)13,106
Capital employed – opening278,444286,887292,797
Capital employed – closing269,323266,551278,444
Capital employed – average273,883276,719285,620
ROACE on a Net income basis(4.7)%(6.8)%4.6%


 

ROACE on a CCS basis excluding identified items

In this calculation, the sum of CCS earnings excluding identified items for the current and previous three quarters, adjusted for after-tax interest expense, is expressed as a percentage of the average capital employed for the same period.

            
 
$ millionQuarters
 Q1 2021Q4 2020Q1 2020
CCS earnings - current and previous three quarters(18,125)(19,702)13,256
Identified items - current and previous three quarters(23,562)(24,777)(1,266)
Interest expense after tax – current and previous three quarters2,7282,8222,854
CCS earnings excluding identified items before interest expense - current and previous three quarters8,1657,89817,376
Capital employed – average273,883276,719285,620
ROACE on a CCS basis excluding identified items3.0%2.9%6.1%

E.    Gearing

Gearing is a measure of Shell’s capital structure and is defined as net debt as a percentage of total capital. Net debt is defined as the sum of current and non-current debt, less cash and cash equivalents, adjusted for the fair value of derivative financial instruments used to hedge foreign exchange and interest rate risks relating to debt, and associated collateral balances. Management considers this adjustment useful because it reduces the volatility of net debt caused by fluctuations in foreign exchange and interest rates, and eliminates the potential impact of related collateral payments or receipts. Debt-related derivative financial instruments are a subset of the derivative financial instrument assets and liabilities presented on the balance sheet. Collateral balances are reported under “Trade and other receivables” or “Trade and other payables” as appropriate.



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$ millionQuarters
 March 31, 2021December 31, 2020March 31, 2020
Current debt14,54116,89915,767
Non-current debt87,82891,11579,298
Total debt102,369108,01495,065
Of which lease liabilities28,17728,41929,290
Add: Debt-related derivative financial instruments: net liability/(asset)(864)(1,979)1,218
Add: Collateral on debt-related derivatives: net liability/(asset)7321,181(58)
Less: Cash and cash equivalents(30,985)(31,830)(21,811)
Net debt71,25275,38674,413
Add: Total equity166,953158,537183,379
Total capital238,205233,923257,792
Gearing29.9 %32.2 %28.9 %

F.    Operating expenses

Operating expenses is a measure of Shell’s cost management performance, comprising the following items from the Consolidated Statement of Income: production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses.

Underlying operating expenses is a measure aimed at facilitating a comparative understanding of performance from period to period by removing the effects of identified items, which, either individually or collectively, can cause volatility, in some cases driven by external factors.

            
 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
6,808  6,701  5,982  Production and manufacturing expenses
2,462  2,751  2,393  Selling, distribution and administrative expenses
166  199  243  Research and development
9,436  9,652  8,618  Operating expenses
   Of which identified items:
(747) (371) (18) Redundancy and restructuring (charges)/reversal
—  (737) —  (Provisions)/reversal
35  —  —  Other
(712) (1,108) (18)  
8,724  8,544  8,600  Underlying operating expenses

G.    Free cash flow

Free cash flow is used to evaluate cash available for financing activities, including dividend payments and debt servicing, after investment in maintaining and growing the business. It is defined as the sum of “Cash flow from operating activities” and “Cash flow from investing activities”.

Cash flows from acquisition and divestment activities are removed from Free cash flow to arrive at the Organic free cash flow, a measure used by management to evaluate the generation of free cash flow without these activities.



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1ST QUARTER 2021 UNAUDITED RESULTS


            
 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
8,294  6,287  14,851  Cash flow from operating activities
(590) (5,406) (2,718) Cash flow from investing activities
7,704  882  12,133  Free cash flow
3,412  212  2,233  Less: Divestment proceeds (Reference I)
—  —  —  Add: Tax paid on divestments (reported under "Other investing cash outflows")
89  202  404  Add: Cash outflows related to inorganic capital expenditure1
4,381  871  10,304  Organic free cash flow2

1.Cash outflows related to inorganic capital expenditure includes portfolio actions which expand Shell's activities through acquisitions and restructuring activities as reported in capital expenditure lines in the Consolidated Statement of Cash Flows.

2.Free cash flow less divestment proceeds, adding back outflows related to inorganic expenditure.

H.    Cash flow from operating activities excluding working capital movements

Working capital movements are defined as the sum of the following items in the Consolidated Statement of Cash Flows:    (i) (increase)/decrease in inventories, (ii) (increase)/decrease in current receivables, and (iii) increase/(decrease) in current payables.

Cash flow from operating activities excluding working capital movements is a measure used by Shell to analyse its operating cash generation over time excluding the timing effects of changes in inventories and operating receivables and payables from period to period.

            
 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
8,294  6,287  14,851  Cash flow from operating activities
(3,426) (1,809) 9,594  (Increase)/decrease in inventories
(6,829) (107) 6,314  (Increase)/decrease in current receivables
5,865  1,579  (8,430) Increase/(decrease) in current payables
(4,390) (337) 7,478  (Increase)/decrease in working capital
12,683  6,624  7,373  Cash flow from operating activities excluding working capital movements
   Of which:
3,653  2,195  3,352  Integrated Gas
4,702  2,890  3,718  Upstream
3,313  782  353  Oil Products
1,045  775  189  Chemicals
(30) (17) (239) Corporate

I.    Divestment proceeds

Divestment proceeds represent cash received from divestment activities in the period. Management regularly monitors this measure as a key lever to deliver sustainable cash flow.

            
 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
3,106  941,613Proceeds from sale of property, plant and equipment and businesses
275  111547Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans¹
31  773Proceeds from sale of equity securities
3,412  2122,233Divestment proceeds

1.As from 2021 renamed from 'Proceeds from sale of joint ventures and associates'.


 



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ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


J.    Earnings before interest, taxes, depreciation and amortisation

The “Adjusted EBITDA (FIFO basis)” and “Adjusted EBITDA (CCS basis)” measures are introduced with effect from January 1, 2021. Management uses both measures to evaluate Shell’s performance in the period and over time.


 

We define “Adjusted EBITDA (FIFO basis)” as “Income/(loss) attributable to Royal Dutch Shell plc shareholders” adjusted for identified items; tax charge/(credit); depreciation, amortisation and depletion; exploration well write-offs and net interest expense. We also use “Adjusted EBITDA” on a CCS basis as the current cost of supplies adjustment aims to remove the impact of price changes on our inventories in our Oil Products and Chemicals segments, therefore enabling comparisons over time.


 

            
 
Quarters$ million
Q1 2021Q4 2020Q1 2020 
5,660(4,014)(24)Income/(loss) attributable to Royal Dutch Shell plc shareholders
1,112(4,871)(104)Less: Identified items attributable to Royal Dutch Shell plc shareholders
1,903865417Add: Taxation charge/(credit) excluding tax impact of identified items
5,8126,2556,344Add: Depreciation, depletion and amortisation excluding impairments
13619983Add: Exploration well write-offs
8929081,118Add: Interest expense excluding identified items
134168199Less: Interest income
13,157  8,916  7,843Adjusted EBITDA (FIFO basis)
(1,314)(465)2,780Add: Current cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders
(353)(133)916Add: Current cost of supplies adjustment to taxation charge/(credit)
11,4908,31911,540Adjusted EBITDA (CCS basis)



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ROYAL DUTCH SHELL PLC
1ST QUARTER 2021 UNAUDITED RESULTS


CAUTIONARY STATEMENT

All amounts shown throughout this announcement are unaudited. All peak production figures in Portfolio Developments are quoted at 100% expected production. 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 Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. “Subsidiaries”, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell plc's Form 20-F for the year ended December 31, 2020 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, April 29, 2021. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.

The content of websites referred to in this announcement do not form part of this announcement.

We may have used certain terms, such as resources, in this announcement that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

This announcement contains inside information.

April 29, 2021

   
The information in this announcement reflects the unaudited consolidated financial position and results of Royal Dutch Shell plc. Company No. 4366849, Registered Office: Shell Centre, London, SE1 7NA, England, UK.


 

Contacts:


 

- Linda M. Coulter, Company Secretary

- Media: International +44 (0) 207 934 5550; USA +1 832 337 4355


 

LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70

Classification: Inside Information


 



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