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Share Name Share Symbol Market Type Share ISIN Share Description
Royal Dutch Shell Plc LSE:RDSA London Ordinary Share GB00B03MLX29 'A' ORD EUR0.07
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -10.40 -0.7% 1,474.20 1,473.80 1,474.40 1,500.40 1,469.00 1,488.40 4,698,128 16:35:14
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 13,205.3 -19,723.5 -203.3 - 60,460

Royal Dutch Shell plc Shell First Quarter 2021 Update Note

07/04/2021 7:00am

UK Regulatory (RNS & others)


 
TIDMRDSA TIDMRDSB 
 
   The Hague, April 7, 2021 - This is an update to the first quarter 2021 
outlook provided in the fourth quarter results announcement on February 
4, 2021. The impacts presented here may vary from the actual results and 
are subject to finalisation of the first quarter 2021 results. Unless 
otherwise indicated, presented impacts relate to Adjusted Earnings on a 
post-tax basis. 
 
   The Texas winter storm had an impact on our operations and is expected 
to have an aggregate adverse impact of up to $200 million on Adjusted 
Earnings, individual segmental impacts are further detailed below. 
 
   INTEGRATED GAS 
 
 
   -- Production is expected to be between 920 and 960 thousand barrels of oil 
      equivalent per day. 
 
   -- LNG liquefaction volumes are expected to be between 7.8 and 8.4 million 
      tonnes. 
 
   -- Pre-tax depreciation is expected to be between $1.3 and $1.4 billion. 
 
   -- Trading and optimisation results are expected to be significantly below 
      average. 
 
   -- Approximately 80% of our term sales of LNG in 2020 have been oil price 
      linked with a price-lag of up to 6 months. The volatility of the JKM spot 
      price in January had limited impact on Adjusted Earnings. 
 
   -- Operational and net financial impact from the Texas winter storm is 
      expected to be limited as trading margins are offset by provisions due to 
      related counterparty credit risk. 
 
   -- CFFO is expected to be impacted by a working capital outflow driven by 
      increased receivables reflecting the higher commodity price environment. 
 
   -- CFFO excluding working capital is expected to be not significantly 
      impacted by cash flows related to commodity derivatives. 
 
   UPSTREAM 
 
 
   -- Adjusted Earnings are expected to be positive in the first quarter 2021, 
      capturing the upside from the current commodity price environment. 
 
   -- Production is expected to be between 2,400 and 2,475 thousand barrels of 
      oil equivalent per day, including 10 to 20 thousand barrels per day lower 
      production due to the Texas winter storm. 
 
   -- Total Adjusted Earnings are expected to be adversely impacted by up to 
      $40 million due to operational impacts of the Texas winter storm. 
 
   -- Pre-tax depreciation is expected to be between $3.1 and $3.4 billion. 
 
   -- Currency effects are expected to adversely impact Adjusted Earnings by up 
      to $200 million. 
 
   -- Tax expenses are expected to be between $700 and $1,100 million. 
 
   -- Tax paid is expected to be between $500 and $750 million. 
 
   -- Working capital outflows as expected due to increased receivables 
      reflecting the higher commodity price environment. 
 
   OIL PRODUCTS 
 
 
   -- Refinery utilisation is expected to be between 71% and 75%. Latest 
      refinery crude distillation capacities are provided in the 2020 Annual 
      Report, replacing calendar-day with stream day. 
 
   -- Refining indicative margin is around $2.6/bbl, slightly improved from 
      $1.6/bbl in the fourth quarter 2020. Definition and formula are provided 
      at the end of this release. 
 
   -- Trading and optimisation results are expected to be average and higher 
      than the fourth quarter 2020. 
 
   -- Sales volumes are expected to be between 3,700 and 4,700 thousand barrels 
      per day. 
 
   -- Marketing results are expected to be higher compared with the fourth 
      quarter 2020, as higher margins and lower costs are more than offsetting 
      lower sales volumes. 
 
   -- Pre-tax depreciation is expected to be between $0.9 and $1.1 billion. 
 
   -- Total Adjusted Earnings are expected to be adversely impacted by up to 
      $80 million due to operational impacts of the Texas winter storm. 
 
   -- Working capital outflows are expected due to the higher commodity price 
      environment. 
 
   -- CFFO excluding working capital is expected to be positively impacted by 
      the lower cash cost of sales. 
 
 
   CHEMICALS 
 
 
   -- Chemicals Adjusted Earnings are expected to be positively impacted by 
      improved base margins and slightly higher intermediate margins compared 
      with the fourth quarter 2020. 
 
   -- Chemicals manufacturing plant utilisation is expected to be between 77% 
      and 81%. 
 
   -- Chemicals sales volumes are expected to be between 3,500 and 3,700 
      thousand tonnes. 
 
   -- Pre-tax depreciation is expected to be between $250 and $350 million. 
 
   -- Total Adjusted Earnings are expected to be adversely impacted by around 
      $60 million due to operational impacts of the Texas winter storm. 
 
   -- CFFO is expected to be negatively impacted by $150 to $250 million due to 
      timing effect of dividends received from Joint Ventures & Associates. 
 
 
   CORPORATE 
 
 
   -- Corporate segment Adjusted Earnings are expected to be a net expense of 
      $600 to $700 million for the first quarter. This excludes the impact of 
      currency exchange effects. 
 
 
   Shell enhancing financial disclosures 
 
   At our first quarter 2021 results announcement we are planning to 
provide enhanced voluntary disclosures in a Quarterly Databook, to be 
available on www.shell.com/investors. The disclosures will cover 
Integrated Gas, Upstream, Refining & Trading, Marketing and Chemicals. 
The publication of the enhanced disclosures will be followed by a 
webcast on the 4th of May 2021, with an opportunity for Q&A. 
 
   Full-year price and margin sensitivities 
 
   The Adjusted Earnings and CFFO price and margin sensitivities are 
indicative and in relation to the full-year results. These exclude the 
short-term impacts from working capital movements, cost-of-sales 
adjustments and derivatives. Sensitivity accuracy is subject to trading 
and optimisation performance, including short-term opportunities, 
depending on market conditions. 
 
 
 
 
$ million                              Adjusted Earnings  CFFO 
-------------------------------------  -----------------  ----- 
Integrated Gas 
-------------------------------------  -----------------  ----- 
+$10/bbl Brent                                     1,100  1,200 
-------------------------------------  -----------------  ----- 
+$10/bbl Japan Customs-cleared Crude 
 - 3 months                                        1,100  1,200 
-------------------------------------  -----------------  ----- 
Upstream 
-------------------------------------  -----------------  ----- 
+$10/bbl Brent                                     3,000  4,000 
-------------------------------------  -----------------  ----- 
+$1/mmbtu Henry Hub                                  350    450 
-------------------------------------  -----------------  ----- 
+$1/mmbtu EU TTF                                     150    200 
-------------------------------------  -----------------  ----- 
Refining 
-------------------------------------  -----------------  ----- 
+$1/bbl indicative refining margin     500                -- 
-------------------------------------  -----------------  ----- 
 
 
   Indicative refining margin 
 
   The indicative margin is an approximation of Shell's global net realised 
refining margin, calculated using price and margin markers from third 
parties' databases. It is based on an approximation of Shell's crude 
intake and production from refinery units. The actual margins realised 
by Shell may vary due to factors including specific local market effects, 
refinery configuration, crude diet, operating decisions and production. 
 
   Q1 2021: $2.65/bbl 
 
   Q4 2020: $1.59/bbl 
 
   Q3 2020: $0.84/bbl 
 
   The formula provided will be reviewed and updated annually, reflecting 
any changes in our refining portfolio. 
 
   Calculation formula ($/bbl) - note that brackets indicate a negative 
sign 
 
   Brent*(25%) + MSW*(11%) + LLS*(24.5%) + Dubai*(24.5%) + Urals CIF 
EU*(13%) + NWE Naphtha (RDAM FOB Barge)*8% + NWE Mogas premium 
unleaded*12.50% + NWE Kero*11.50% + NWE AGO*24.5% + NWE Benzene*1% + 
Sing Fueloil 380 cst*6.50% + Edmonton ULG Reg*3.50% + Edmonton 
ULSD*3.50% + USGC Normal Butane*1.50% + USGC LS No 2 Gasoil*7% + USGC 
Natural Gas*(2%) + USGC CBOB*15% + RINS*(20.50%) + NWE Propylene 
Platts*0.50% -- $1.7/bbl 
 
   Consensus 
 
   The consensus collection for quarterly Adjusted Earnings and CFFO 
excluding working capital movements, managed by VARA research, will be 
published on 22 April 2021. 
 
   Contacts 
 
   Media International: +44 (0) 207 934 5550 
 
   Media Americas: +1 832 337 4355 
 
   Cautionary Note 
 
   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 the following forward-looking Non-GAAP 
measure: Adjusted Earnings.We are unable to provide a reconciliation of 
these forward-looking Non-GAAP measures to the most comparable GAAP 
financial measures because certain information needed to reconcile the 
above Non-GAAP measure to the most comparable GAAP financial measure is 
dependent on future events some which are outside the control of the 
company, such as oil and gas prices, interest rates and exchange rates. 
Moreover, estimating such GAAP measures 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 calculated in a manner which 
is consistent with the accounting policies applied in Royal Dutch Shell 
plc's consolidated financial statements. 
 
   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 Royal Dutch 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 Royal Dutch 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 Royal Dutch 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's Form 20-F for the year ended December 31, 2020 
(available at www.shell.com/investors 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 7, 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. 
 
   LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70 
 
 
 
 
 
 
 
 

(END) Dow Jones Newswires

April 07, 2021 02:00 ET (06:00 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

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