By Jaime Llinares Taboada

 

Royal Dutch Shell PLC reported results for the fourth quarter and the whole of 2020 on Thursday. Here's what you need to know:

 

ADJUSTED EARNINGS ON A CCS BASIS: The Anglo-Dutch oil major made earnings on a current cost of supplies basis excluding identified items of $393 million for the fourth quarter, missing the $597 million market consensus--taken from Vara Research and based on 25 analysts. The metric is a figure similar to the net income that U.S. oil companies report, but strips out exceptional items.

 

FULL-YEAR LOSS: Shell booked a $4.01 billion net loss in the fourth quarter driven by exceptional costs such as impairments and contract provisions, bringing the full-year loss to $21.68 billion. This was lower than the $17.77 billion market forecast taken from FactSet and based on 12 analysts' estimates.

 

WHAT WE WATCHED:

--INTEGRATED GAS: Unlike the wider group, the performance of Shell's natural gas division improved in the fourth quarter of the year. Adjusted earnings came in at $1.11 billion, beating the $1.00 billion market consensus--taken from Vara Research and based on 21 analysts--and up from $768 million in the third quarter. This was achieved despite liquefied natural gas volumes falling 1.4% quarter-on-quarter.

--DEBT REDUCTION: Shell's net debt increased to $75.39 billion as of the end of the year from the $73.46 billion reported three months earlier. The company blamed lower free cash flow generation and lease additions. Shell in October set a target to reduce net debt to $65 billion, before distributing 20%-30% of cash flow from operations to shareholders through higher dividends and share buybacks.

 

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

 

(END) Dow Jones Newswires

February 04, 2021 06:42 ET (11:42 GMT)

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