Shell fourth quarter 2019 update note
20 Diciembre 2019 - 1:02AM
Shell fourth quarter 2019 update note
Shell fourth quarter 2019 update note
The Hague, December 20, 2019 - This is an
update to the fourth quarter 2019 outlook provided in the third
quarter results announcement on October 31, 2019. The impacts
presented here may vary from the actual results and are subject to
finalisation of the fourth quarter 2019 results which are scheduled
to be released on January 30, 2020.
Unless otherwise indicated, presented earnings impacts relate to
earnings on a current cost of supplies basis, attributable to
shareholders, excluding identified items.
Integrated Gas
- Production is expected to be between 920 and 970 thousand
barrels of oil equivalent per day
- LNG liquefaction volumes are expected to be between 8.8 and 9.4
million tonnes
- Trading and optimisation performance is expected to be average
and approximately in line with the second quarter 2019
- As per previous disclosures, more than 80% of our term
contracts for LNG sales in 2018 were oil price linked with a
price-lag of typically 3-6 months
- Note that, as in previous quarters, CFFO in Integrated Gas can
be impacted by margining resulting from movements in the forward
commodity curves
Upstream
- Production is expected to be between 2,775 and 2,825 thousand
barrels of oil equivalent per day
- Additional well write-offs in the range of $100-200 million are
expected compared to the fourth quarter 2018. No cash impact is
expected
- Provision updates for decommissioning and restoration
obligations are expected to have a negative impact on earnings in
the range of $100-200 million. No cash impact is expected
- Deferred tax charges, which include the annual reassessment of
deferred tax assets performed in the fourth quarter, are expected
to have a negative impact on earnings in the range of $500-600
million compared to the fourth quarter 2018. No cash impact is
expected
Downstream
- Refinery availability is expected to be between 91% and 93%.
Similar to the third quarter 2019, refining margins are impacted by
the continued weak macro environment
- Oil Products sales volumes are expected to be between 6,500 and
7,000 thousand barrels per day
- Marketing margins are expected to be lower due to seasonal
trends, and weaker compared to the fourth quarter 2018 due to crude
price movements impacting Retail margins
- Chemicals manufacturing plant availability is expected to be
between 83% and 85%
- Chemicals sales volumes are expected to be between 3,400 and
3,600 thousand tonnes
- Chemicals cracker and intermediate margins are expected to be
materially lower than the third quarter 2019 due to the continued
weak macro environment. Total margins are expected to be impacted
by outages and substantially lower asset utilisation
Corporate
- Corporate segment earnings excluding identified items are
expected to be a net expense of $1,000-1,100 million for the fourth
quarter. This includes deferred tax reassessments but excludes the
impact of currency exchange rate effects
Other
- Based on the macro outlook, post-tax impairment charges in the
range of $1.7-2.3 billion are expected for the quarter. Impairment
charges are reported as identified items
- Full year 2019 cash capital expenditure is expected to be
around the lower end of the $24-29 billion range
- As per previous disclosures, CFFO price sensitivity at Shell
group level is $6 billion per annum for each $10 per barrel Brent
price movement
- Note that this price sensitivity is appropriate for smaller
price changes, and is best used for full-year numbers
- As per previous disclosures, total cash tax payments in the
second and fourth quarters are generally expected to be higher than
in the first and third quarters
ConsensusThe consensus collection for quarterly
earnings and CFFO, managed by VARA research, is scheduled to be
opened for submission on January 8, 2020, closed on January 22,
2020, and made public on January 23, 2020.
Royal Dutch Shell plc
Enquiries:
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Cautionary NoteThe companies in which Royal
Dutch Shell plc directly and indirectly owns investments are
separate legal entities. In this announcement “Shell”, “Shell
group” and “Royal Dutch Shell” 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 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; and (m) 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, 2018 (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, December 20, 2019. 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.
This announcement may contain references to Shell’s website.
These references are for the readers’ convenience only. Shell is
not incorporating by reference any information posted on
www.shell.com.
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. U.S. 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.
LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70