Simon Henry, CFO of Shell, comments on the Q1 2014 results
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Hello, I am Simon Henry, the Chief Financial Officer of Royal Dutch Shell.
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Today we announced our quarterly financial results.
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Let me give you the highlights.
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Our first quarter 2014 earnings were $7.3 billion on a clean Current Cost of Supplies
basis.
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The earnings per share decreased by 2% from first quarter 2013.
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Our Cash flow generated was around $14 billion.
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On a Q1 to Q1 basis we saw a decline in Downstream earnings and broadly flat
Upstream results.
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These are more robust results from Shell.
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However, as we saw in 2013, there is high volatility in the macro-environment,
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and high volatility in our quarterly results.
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Our strategy and financial framework have not changed.
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We aim to grow our dividends sustainably through the business cycle, driven by growing
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cash generation.
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All at competitive returns.
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The priorities we set out at the start of this year have not changed.
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There is no complacency.
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We still have much to do to improve our current results.
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This means focusing on better financial performance, on enhanced capital efficiency
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which includes an increase in the asset sales programme, and continuing strong project
delivery.
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We have taken an $2.6 billion impairment today, in Downstream, that reflects Shell’s
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updated views on the outlook for refining margins,
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where there are substantial pressures on the industry.
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This impairment represents about 14% of the fixed assets in our total refining business.
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Upstream underlying earnings were $5.7 billion, essentially unchanged from year ago
levels.
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Our Upstream results included a record result from the Integrated Gas business
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which showed an 30% increase year-over-year, and as well we saw strong results from
gas trading.
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Downstream earnings were $1.6 billion, 15% lower than year-ago levels, as industry
margins declined.
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We have added new opportunities during this quarter, we started up new production,
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we announced further asset sales.
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This is all part of positioning the company for profitable growth for the future.
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We completed the Repsol LNG acquisition, made new gas discoveries in Asia Pacific,
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and we added new exploration acreage world-wide.
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We entered FEED on a series of new projects, that includes the LNG opportunity in
Canada,
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the deep water new hub development at Appomatox in the Gulf of Mexico
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and the Peterhead CCS project in the United Kingdom.
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We announced divestments of businesses in Australia, Italy and the USA.
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Dividends are Shell’s main route for returning cash to shareholders, and we are
announcing
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a 4% increase in dividend for Q1 today.
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We have distributed more than $11 billion of dividends in the last 12 months,
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and completed some $6 billion of share buy backs.
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All of this underlines our commitment to shareholder returns.
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Thank you.