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ROYAL DUTCH SHELL PLC 3RD QUARTER 2021 UNAUDITED RESULTS

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·29-min read
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ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS





SUMMARY OF UNAUDITED RESULTS

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

Reference

2021

2020

%

(447)

3,428

489

-113

Income/(loss) attributable to shareholders

8,640

(17,666)

+149

(988)

2,634

177

-138

CCS earnings attributable to shareholders

Note 2

5,992

(15,443)

+139

4,130

5,534

955

-25

Adjusted Earnings²

A

12,898

4,453

+190

13,460

13,623

7,998

Adjusted EBITDA (CCS basis)

A

38,656

28,159

16,025

12,617

10,403

+27

Cash flow from operating activities

36,935

27,818

+33

(3,804)

(2,946)

(2,833)

Cash flow from investing activities

(7,339)

(7,871)

12,221

9,671

7,571

Free cash flow

G

29,596

19,947

4,840

4,383

3,737

Cash capital expenditure

C

13,197

12,324

8,359

8,470

8,095

-1

Operating expenses

F

26,264

25,137

+4

8,696

8,505

7,854

+2

Underlying operating expenses

F

25,924

23,958

+8

2.9%

3.2%

(4.9)%

ROACE (Net income basis)

D

2.9%

(4.9)%

6.1%

4.9%

3.9%

ROACE on an Adjusted Earnings plus Non-controlling interest (NCI) basis

D

6.1%

3.9%

57,492

65,735

73,463

Net debt

E

57,492

73,463

25.6%

27.7%

31.4%

Gearing

E

25.6%

31.4%

3,068

3,254

3,081

-6

Total production available for sale (thousand boe/d)

3,269

3,392

-4

(0.06)

0.44

0.06

-114

Basic earnings per share ($)

1.11

(2.27)

+149

0.53

0.71

0.12

-25

Adjusted Earnings per share ($)

B

1.66

0.57

+191

0.24

0.24

0.1665

Dividend per share ($)

0.6535

0.4865

+34



1. Q3 on Q2 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).




Third quarter 2021 income attributable to Royal Dutch Shell plc shareholders was a loss of $0.4 billion, which included non-cash charges of $5.2 billion due to the fair value accounting of commodity derivatives and post-tax impairment charges of $0.3 billion, partly offset by net gains on sale of assets of $0.3 billion.




Adjusted Earnings for the quarter were $4.1 billion. Cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders for the third quarter 2021 was negative $0.5 billion. Hurricane Ida impacted our operations, with an aggregate adverse impact of around $0.4 billion on Adjusted Earnings.




Cash flow from operating activities for the third quarter 2021 was $16.0 billion, which included positive impacts of $4.0 billion from commodity derivatives partly offset by negative working capital movements of $1.4 billion. Cash flow from investing activities for the quarter was an outflow of $3.8 billion, mainly driven by capital expenditure and partly offset by proceeds from sale of property, plant and equipment and businesses.




Compared with the second quarter 2021, current quarter Adjusted Earnings reflected comparative adverse one-off tax impacts, lower production volumes partly due to the impact of Hurricane Ida, and comparative lower contributions from trading and optimisation. This was partly offset by higher oil, LNG and gas prices.




At the end of the third quarter 2021, net debt was $57.5 billion, compared with $65.7 billion at the end of the second quarter 2021, mainly driven by free cash flow generation in the quarter, partly offset by dividends and share buybacks. Gearing was 25.6% at the end of the third quarter 2021, compared with 27.7% at the end of the second quarter 2021, mainly driven by net debt reduction.




Dividends declared to Royal Dutch Shell plc shareholders for the quarter amount to $0.24 per share. During the quarter, $1.0 billion of share buybacks were completed out of a total target of $2 billion in the second half of 2021. Additional shareholder distributions of $7 billion related to the Permian sale to start in 2022, post deal completion.









ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS







This announcement, together with supplementary financial and operational disclosure and a separate press release for this quarter, is available at www.shell.com/investors1.




1. Not incorporated by reference.



THIRD QUARTER 2021 PORTFOLIO DEVELOPMENTS



Integrated Gas

In July 2021, we signed a memorandum of understanding with Deutsche Telekom to advance digital innovation as both companies accelerate their transitions to net-zero emissions.




In July 2021, we started production on Block 5C in the East Coast Marine Area (ECMA) in Trinidad and Tobago.






Upstream

In July 2021, we announced the final investment decision for Whale, a deep-water development in the US Gulf of Mexico.

In August 2021, we announced a final investment decision taken by the Libra consortium, operated by Petrobras, to contract the Mero-4 floating production, storage and offloading vessel to be deployed at the Mero field in offshore Brazil.




In August 2021, we announced a final investment decision on the Timi gas development project in Malaysia.




In September 2021, we reached an agreement for the sale of the Permian business in the USA for a base consideration of $9.5 billion in cash. The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions to start in 2022, post deal completion, with the remainder used for further strengthening of the balance sheet.




In September 2021, we completed the sale of upstream assets in Egypt’s Western Desert for a base consideration of $646 million.



Oil Products

In July 2021, we announced the start-up of Europe's largest polymer electrolyte membrane hydrogen electrolyser at the Energy and Chemicals Park Rheinland, Germany, producing green hydrogen.

In July 2021, we reached an agreement for the sale of the non-operated 37.5% shareholding in the Germany PCK Schwedt Refinery.




In August 2021, we marked the start of trading in shares of Raízen S.A. on the São Paulo Stock Exchange (B3), following the successful execution of an initial public offering.




In September 2021, we announced a final investment decision to build an 820,000-tonnes-a-year biofuels facility at the Energy and Chemicals Park Rotterdam, Netherlands.




In October 2021, we signed an agreement to acquire 248 company-owned fuel and convenience retail sites from the Landmark group of companies, whose convenience stores operate in Texas under the Timewise brand. The agreement also includes supply agreements with an additional 117 independently operated fuel and convenience sites.






Page 2






ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




PERFORMANCE BY SEGMENT



INTEGRATED GAS

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

Reference

2021

2020

%

(3,247)

422

(151)

-869

Segment earnings

(297)

(6,298)

+95

(4,927)

(1,187)

(920)

Of which: Identified items

A

(5,002)

(9,572)

1,680

1,609

768

+4

Adjusted Earnings

A

4,705

3,274

+44

3,768

3,364

2,349

Adjusted EBITDA (CCS basis)

A

10,339

8,999

5,674

3,761

2,323

+51

Cash flow from operating activities

11,926

8,972

+33

7,871

4,350

2,396

+81

Cash flow from operating activities excluding working capital movements

H

15,874

8,619

+84

1,272

880

1,020

Cash capital expenditure

C

3,167

2,638

166

162

143

+2

Liquids production available for sale (thousand b/d)

166

152

+9

4,476

4,502

4,067

-1

Natural gas production available for sale (million scf/d)

4,532

4,343

+4

938

938

844

0

Total production available for sale (thousand boe/d)

947

901

+5

7.39

7.49

7.80

-1

LNG liquefaction volumes (million tonnes)

23.04

25.03

-8

15.18

15.92

17.63

-5

LNG sales volumes (million tonnes)

47.48

54.73

-13



1.Q3 on Q2 change.




Third quarter segment earnings amounted to a loss of $3,247 million and Adjusted Earnings for the quarter were $1,680 million. As part of our normal business, commodity derivative hedge contracts are entered into for mitigation of future purchases, sales and inventory. As these commodity derivatives are fair value accounted for, this creates an accounting mismatch over periods. As a result, this quarter included losses of $4,929 million due to the fair value accounting of commodity derivatives (primarily due to gas price developments) and are part of identified items (see Reference A).

Cash flow from operating activities excluding working capital movements for the quarter was $7,871 million, primarily driven by Adjusted EBITDA of $3,768 million and derivatives cash inflows of $4,280 million driven by variation margin in gas and power trading due to significant gas and electricity price increases. As these variation margin cash inflows reflect underlying hedges, this effect could reverse in future quarters.




Compared with the second quarter 2021, Integrated Gas Adjusted Earnings primarily reflected higher realised prices for LNG, oil and gas. This was partly offset by comparative lower earnings contribution from the Renewables & Energy Solutions business due to lower margins in North America and comparative adverse one-off tax impacts.

Compared with the second quarter 2021, total oil and gas production remained at a similar level due to lower maintenance activities, offset by field decline and lower demand. LNG liquefaction volumes decreased by 1% due to feedgas constraints and cargo timing, partly offset by lower maintenance activities.

Nine months segment earnings amounted to a loss of $297 million. This included losses of $5,447 million due to the fair value accounting of commodity derivatives. These are mainly related to gas and power trading in Europe to hedge supply and purchase contracts as well as inventory and to physical future global LNG sales that are partially hedged through paper derivative positions. There were also post-tax impairment charges of $588 million, partly offset by gains on sale of assets of $1,094 million. These gains and losses are part of identified items (see Reference A). Adjusted Earnings for the nine months were $4,705 million.




Cash flow from operating activities excluding working capital movements for the first nine months of 2021 was $15,874 million, primarily driven by Adjusted EBITDA of $10,339 million and cash inflows of $6,768 million from commodity derivatives.




Compared with the first nine months 2020, Integrated Gas Adjusted Earnings primarily reflected higher realised prices for oil, gas and LNG as well as one-off favourable tax impacts. This was partly offset by lower contributions from trading and optimisation.




Compared with the first nine months 2020, total oil and gas production increased by 5% mainly due to the restart of production at the Prelude floating LNG operations in Australia, production sharing contract effects and increased demand, partly offset by field decline. LNG liquefaction volumes decreased by 8% due to feedgas constraints and higher maintenance activities, partly offset by the restart of production at the Prelude floating LNG operations in Australia.



Page 3






ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




UPSTREAM

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

Reference

2021

2020

%

1,274

2,415

(1,110)

-47

Segment earnings

4,786

(8,694)

+155

(412)

(53)

(226)

Of which: Identified items

A

(332)

(6,590)

1,686

2,469

(884)

-32

Adjusted Earnings

A

5,118

(2,104)

+343

6,766

6,714

2,911

Adjusted EBITDA (CCS basis)

A

18,866

9,421

5,777

5,056

2,101

+14

Cash flow from operating activities

14,940

8,026

+86

5,889

5,444

2,629

+8

Cash flow from operating activities excluding working capital movements

H

16,035

6,894

+133

1,502

1,696

1,245

Cash capital expenditure

C

4,732

5,642

1,497

1,558

1,520

-4

Liquids production available for sale (thousand b/d)

1,544

1,619

-5

3,387

4,082

3,960

-17

Natural gas production available for sale (million scf/d)

4,192

4,768

-12

2,081

2,262

2,203

-8

Total production available for sale (thousand boe/d)

2,267

2,441

-7



1. Q3 on Q2 change.




Third quarter segment earnings were $1,274 million. This included a net charge of $192 million related to the impact of the weakening Brazilian real on a deferred tax position, losses of $181 million due to the fair value accounting of commodity derivatives and post-tax impairment charges of $116 million, partly offset by a gain of $51 million related to remeasurement of redundancy and restructuring costs. These net losses are part of identified items (see Reference A). Adjusted Earnings were $1,686 million.

Cash flow from operating activities for the quarter was $5,777 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, partly offset by negative working capital movements.




Compared with the second quarter 2021, Upstream Adjusted Earnings reflected the comparative adverse impact of a one-off release of a tax provision in Nigeria in the second quarter, higher well write-offs and lower volumes. These were partly offset by higher realised oil and gas prices.




Compared with the second quarter 2021, total production decreased by 8%, mainly due to the effects of Hurricane Ida and unfavourable seasonal effects.




Nine months segment earnings were $4,786 million. This included losses of $378 million due to the fair value accounting of commodity derivatives, a net charge of $99 million related to the impact of the weakening Brazilian real on a deferred tax position, and post-tax impairment charges of $72 million, partly offset by a net gain of $240 million related to the sale of assets. These net gains are part of identified items (see Reference A). Adjusted Earnings were $5,118 million.




Cash flow from operating activities for the first nine months of 2021 was $14,940 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, partly offset by negative working capital movements.




Compared with the first nine months 2020, Upstream Adjusted Earnings reflected higher realised oil and gas prices, the one-off release of a tax provision in Nigeria and lower depreciation.




Compared with the first nine months 2020, total production decreased by 7%, mainly due to the impact of divestments and higher maintenance activities.












Page 4






ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




OIL PRODUCTS

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

Reference

2021

2020

%

1,362

33

2,092

+4065

Segment earnings²

2,044

1,281

+60

150

(1,267)

411


Of which: Identified items

A

(1,344)

(4,174)

1,212

1,299

1,680

-7

Adjusted Earnings²

A

3,389

5,454

-38

Of which:

(3)

112

55

-102

Refining & Trading³

5

1,713

-100

1,215

1,187

1,626

+2

Marketing³

3,384

3,742

-10

2,360

2,608

2,520

Adjusted EBITDA (CCS basis)

A

7,080

9,134

Of which:

415

676

228

Refining & Trading³

1,558

3,425

1,945

1,932

2,293

Marketing³

5,522

5,710

3,757

2,213

5,131

+70

Cash flow from operating activities

6,863

9,647

-29

3,262

3,365

3,476

-3

Cash flow from operating activities excluding working capital movements

H

9,939

6,259

+59

976

882

832

Cash capital expenditure

C

2,527

2,019

1,629

1,833

1,972

-11

Refinery processing intake (thousand b/d)

1,737

2,104

-17

4,665

4,552

4,740

+3

Oil Products sales volumes (thousand b/d)

4,462

4,686

-5



1. Q3 on Q2 change.

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

3. With effect from Q1 2021, changes are made in the cost and activity allocation between Marketing and Refining & Trading. This resulted in a net Q3 2021 charge of $120 million (nine months 2021: $339 million) to Refining & Trading, with an offsetting amount in Marketing. This change does not impact consolidated Oil Products Adjusted Earnings.







Third quarter segment earnings were $1,362 million. This included a gain of $301 million related to the dilution of interest in the Raizen joint venture, partly offset by post-tax impairment charges of $138 million. These net gains are part of identified items (see Reference A). Adjusted Earnings were $1,212 million.

Cash flow from operating activities for the third quarter 2021 was $3,757 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, as well as positive working capital movements due to lower volumes held in inventory.




Compared with the second quarter 2021, Oil Products Adjusted Earnings reflected lower contributions from trading and optimisation, partly offset by favourable deferred tax movements.




Oil Products sales volumes increased due to favourable seasonal effects and continued demand recovery.




•Refining & Trading Adjusted Earnings reflected lower refinery processing intake and utilisation due to planned maintenance and the impact of Hurricane Ida, as well as lower contributions from trading and optimisation.

•Marketing Adjusted Earnings reflected higher sales volumes.




Refinery utilisation was 71% compared with 76% in the second quarter 2021, due to higher planned maintenance and the impact of Hurricane Ida.




Nine months segment earnings were $2,044 million. This included post-tax impairment charges of $1,268 million, losses of $158 million due to the fair value accounting of commodity derivatives, and redundancy and restructuring costs of $134 million, partly offset by a gain of $301 million related to the dilution of interest in the Raizen joint venture. These net losses are part of identified items (see Reference A). Adjusted Earnings were $3,389 million.




Cash flow from operating activities for the first nine months of 2021 was $6,863 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, partly offset by negative working capital movements and cash outflows for commodity derivatives.






Page 5




ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




Compared with the first nine months 2020, Oil Products Adjusted Earnings reflected lower contributions from trading and optimisation and higher operating expenses. These were partly offset by higher marketing volumes and Oil Sands margins.




Oil Products sales volumes decreased due to lower trading volumes compared with the first nine months of 2020.




•Refining & Trading Adjusted Earnings reflected lower contributions from trading and optimisation and higher operating expenses. These were partly offset by higher Oil Sands margins and lower depreciation.

•Marketing Adjusted Earnings reflected higher operating expenses and favourable tax impacts in the first nine months of 2020, offset by higher sales volumes.




Refinery utilisation was 73% compared with 72% in the first nine months of 2020.



Page 6






ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




CHEMICALS

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

Reference

2021

2020

%

357

462

131

-23

Segment earnings²

1,509

441

+242

(38)

(208)

(96)

Of which: Identified items

A

(286)

(140)

395

670

227

-41

Adjusted Earnings²

A

1,795

581

+209

715

1,036

466

Adjusted EBITDA (CCS basis)

A

2,792

1,439

840

1,133

335

-26

Cash flow from operating activities

2,297

891

+158

684

1,225

488

-44

Cash flow from operating activities excluding working capital movements

H

2,953

981

+201

1,053

895

595

Cash capital expenditure

C

2,678

1,810

3,549

3,609

3,823

-2

Chemicals sales volumes (thousand tonnes)

10,741

11,318

-5



1. Q3 on Q2 change.

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




Third quarter segment earnings were $357 million. This included post-tax impairment charges, and a legal provision. These net losses are part of identified items (see Reference A). Adjusted earnings were $395 million.

Cash flow from operating activities for the quarter was $840 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, as well as positive working capital movements, partly offset by the timing impact of dividends from Joint Ventures and Associates.




Compared with the second quarter 2021, Chemicals Adjusted Earnings reflected the operational impact of Hurricane Ida, lower intermediate and base chemicals margins, as well as lower income from Joint Ventures and Associates.




Chemicals manufacturing plant utilisation was 78% compared with 82% in the second quarter 2021, due to the impact of Hurricane Ida and higher planned maintenance.




Nine months segment earnings were $1,509 million. This included post-tax impairment charges of $227 million, and legal provisions of $37 million. These net losses are part of identified items (see Reference A). Adjusted earnings were $1,795 million.




Cash flow from operating activities for the first nine months was $2,297 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, partly offset by negative working capital movements.




Compared with the first nine months 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 81% for the first nine months 2020 due to the impact of Hurricane Ida.



Page 7




ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS









CORPORATE

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

Reference

2021

2020

(623)

(592)

(739)

Segment earnings

(1,747)

(1,998)

109

(193)

52

Of which: Identified items

A

50

578

(732)

(399)

(792)

Adjusted Earnings

A

(1,797)

(2,576)

(147)

(101)

(247)

Adjusted EBITDA (CCS basis)

A

(421)

(834)

(22)

454

514

Cash flow from operating activities

909

282

(233)

(208)

(33)

Cash flow from operating activities excluding working capital movements

H

(471)

118



Third quarter segment earnings were an expense of $623 million. This included a gain of $108 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 were a net expense of $732 million.

Compared with the second quarter 2021, Adjusted Earnings reflected unfavourable movements in tax credits and currency exchange rate effects, partly offset by lower operating and net interest expenses.

Nine months segment earnings were an expense of $1,747 million. This included a gain of $50 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 were a net expense of $1,797 million.

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



OUTLOOK FOR THE FOURTH QUARTER 2021

Cash capital expenditure was $13.2 billion for the first nine months 2021 and is expected to be around $20 billion for the full year 2021.



Integrated Gas production is expected to be approximately 940 - 980 thousand boe/d and LNG liquefaction volumes are expected to benefit from lower maintenance activities and be approximately 8.0 - 8.6 million tonnes.



Upstream production is expected to be approximately 2,100 - 2,350 thousand boe/d.



Refinery utilisation is expected to be approximately 68% - 76%.

Oil Products sales volumes are expected to be approximately 4,200 - 5,200 thousand b/d.



Chemicals manufacturing plant utilisation is expected to be approximately 73% - 81%.

Chemicals sales volumes are expected to be approximately 3,500 - 3,900 thousand tonnes.



Corporate Adjusted Earnings are expected to be a net expense of approximately $650 - $750 million in the fourth quarter 2021 and a net expense of approximately $2,450 - $2,550 million for the full year 2021. This excludes the impact of currency exchange rate effects.



Page 8






ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




FORTHCOMING EVENTS




Fourth quarter 2021 and full year results and dividends are scheduled to be announced on February 3, 2022. First quarter 2022 results and dividends are scheduled to be announced on May 5, 2022. Second quarter 2022 and half year results and dividends are scheduled to be announced on July 28, 2022. Third quarter 2022 results and dividends are scheduled to be announced on October 27, 2022.








Page 9




ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS



CONSOLIDATED STATEMENT OF INCOME

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

2021

2020

60,044

60,515

44,021

Revenue¹

176,224

136,554

1,014

1,114

461

Share of profit of joint ventures and associates

3,122

1,154

497

134

234

Interest and other income²

3,087

458

61,555

61,764

44,717

Total revenue and other income

182,434

138,167

44,260

39,717

27,276

Purchases

118,346

88,582

5,322

5,162

5,496

Production and manufacturing expenses

17,292

17,299

2,892

3,107

2,366

Selling, distribution and administrative expenses

8,461

7,130

145

201

233

Research and development

511

708

526

332

222

Exploration

1,143

1,239

6,358

8,223

7,689

Depreciation, depletion and amortisation²

20,477

42,871

859

893

992

Interest expense

2,643

3,181

60,362

57,634

44,275

Total expenditure

168,874

161,009

1,193

4,130

442

Income/(loss) before taxation

13,560

(22,842)

1,510

571

(104)

Taxation charge/(credit)

4,535

(5,265)

(317)

3,559

546

Income/(loss) for the period¹

9,025

(17,578)

130

131

57

Income/(loss) attributable to non-controlling interest

385

88

(447)

3,428

489

Income/(loss) attributable to Royal Dutch Shell plc shareholders

8,640

(17,666)

(0.06)

0.44

0.06

Basic earnings per share ($)³

1.11

(2.27)

(0.06)

0.44

0.06

Diluted earnings per share ($)³

1.10

(2.27)



1. See Note 2 “Segment information”.

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

3. See Note 3 “Earnings per share”.






CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

2021

2020

(317)

3,559

546

Income/(loss) for the period

9,025

(17,578)

Other comprehensive income/(loss) net of tax:

Items that may be reclassified to income in later periods:

(943)

575

1,246

– Currency translation differences

(1,219)

(1,101)

(1)

(2)

5

– Debt instruments remeasurements

(17)

20

102

(84)

75

– Cash flow hedging gains/(losses)

150

(214)

89

(51)

(153)

– Net investment hedging gains/(losses)

209

(253)

16

(20)

(59)

– Deferred cost of hedging

(38)

97

(104)

(7)

(51)

– Share of other comprehensive income/(loss) of joint ventures and associates

(167)

(80)

(841)

410

1,063

Total

(1,083)

(1,530)

Items that are not reclassified to income in later periods:

291

1,675

(580)

– Retirement benefits remeasurements

6,594

(3,747)

(25)

10

36

– Equity instruments remeasurements

25

(24)

41

(42)

45

– Share of other comprehensive income/(loss) of joint ventures and associates

(26)

112

307

1,643

(499)

Total

6,592

(3,659)

(534)

2,053

564

Other comprehensive income/(loss) for the period

5,510

(5,189)

(851)

5,612

1,111

Comprehensive income/(loss) for the period

14,535

(22,767)

85

145

82

Comprehensive income/(loss) attributable to non-controlling interest

351

2

(937)

5,467

1,029

Comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders

14,184

(22,768)





Page 10






ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




CONDENSED CONSOLIDATED BALANCE SHEET

$ million

September 30, 2021

December 31, 2020 4

Assets

Non-current assets

Intangible assets

22,344

22,710

Property, plant and equipment

196,261

209,700

Joint ventures and associates

23,724

22,451

Investments in securities

3,662

3,222

Deferred tax

14,542

16,311

Retirement benefits1

8,009

2,474

Trade and other receivables

7,605

7,641

Derivative financial instruments²

1,052

2,805

277,199

287,315

Current assets

Inventories

24,596

19,457

Trade and other receivables

46,366

33,625

Derivative financial instruments²

14,613

5,783

Cash and cash equivalents

38,073

31,830

123,648

90,695

Assets classified as held for sale1

7,922

1,258

131,570

91,953

Total assets

408,769

379,268

Liabilities

Non-current liabilities

Debt

84,705

91,115

Trade and other payables

2,224

2,304

Derivative financial instruments²

571

420

Deferred tax

12,159

10,463

Retirement benefits1,3

11,835

15,605

Decommissioning and other provisions

26,361

27,116

137,856

147,023

Current liabilities

Debt

10,686

16,899

Trade and other payables³

59,722

44,572

Derivative financial instruments²

26,118

5,308

Income taxes payable³

2,809

3,111

Decommissioning and other provisions

3,139

3,622

102,473

73,512

Liabilities directly associated with assets classified as held for sale1

1,758

196

104,230

73,708

Total liabilities

242,086

220,731

Equity attributable to Royal Dutch Shell plc shareholders

163,390

155,310

Non-controlling interest

3,293

3,227

Total equity

166,683

158,537

Total liabilities and equity

408,769

379,268



1. See Note 7 "Other notes to the unaudited 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.



Page 11




ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




4. For Q3 2021, assets held for sale are presented separately. Prior period comparatives have been revised to conform with current year presentation.












CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to Royal Dutch Shell plc shareholders

$ million

Share capital¹

Shares held in trust

Other reserves²

Retained earnings

Total

Non-controlling interest

Total equity

At January 1, 2021

651

(709)

12,752

142,616

155,310

3,227

158,537

Comprehensive income/(loss) for the period

5,544

8,640

14,184

351

14,535

Transfer from other comprehensive income

(14)

14

Dividends³

(4,475)

(4,475)

(305)

(4,780)

Repurchases of shares4

(4)

4

(2,003)

(2,003)

(2,003)

Share-based compensation

350

(68)

93

375

375

Other changes in non-controlling interest

(1)

(1)

20

19

At September 30, 2021

647

(359)

18,218

144,884

163,390

3,293

166,683

At January 1, 2020

657

(1,063)

14,451

172,431

186,476

3,987

190,463

Comprehensive income/(loss) for the period

(5,102)

(17,666)

(22,768)

2

(22,767)

Transfer from other comprehensive income

185

(185)

Dividends3

(5,956)

(5,956)

(242)

(6,198)

Repurchases of shares

(6)

6

(1,214)

(1,214)

(1,214)

Share-based compensation

539

(237)

(230)

73

73

Other changes in non-controlling interest

557

557

(573)

(16)

At September 30, 2020

651

(523)

9,303

147,737

157,168

3,173

160,341



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.

4. Includes shares committed to repurchase and repurchases subject to settlement at the end of the quarter.






Page 12






ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS




CONSOLIDATED STATEMENT OF CASH FLOWS

Quarters

$ million

Nine months

Q3 2021

Q2 2021

Q3 2020

2021

2020

1,193

4,130

442

Income before taxation for the period

13,560

(22,842)

Adjustment for:

723

797

814

– Interest expense (net)

2,277

2,600

6,358

8,223

7,689

– Depreciation, depletion and amortisation

20,477

42,871

323

108

14

– Exploration well write-offs

567

615

(298)

55

(103)

– Net (gains)/losses on sale and revaluation of non-current assets and businesses

(2,316)

(124)

(1,014)

(1,114)

(461)

– Share of (profit)/loss of joint ventures and associates

(3,122)

(1,154)

956

782

468

– Dividends received from joint ventures and associates

2,318

1,609

(538)

(2,495)

405

– (Increase)/decrease in inventories

(6,459)

6,286

(2,859)

(4,080)

(540)

– (Increase)/decrease in current receivables

(13,768)

9,733

1,950

5,016

1,583

– Increase/(decrease) in current payables

12,831

(11,073)

10,116

2,173

233

– Derivative financial instruments

12,474

899

(113)

47

152

– Retirement benefits

43

355

(206)

(124)

43

– Decommissioning and other provisions

(252)

333

894

561

265

– Other

2,038

363

(1,459)

(1,465)

(601)

Tax paid

(3,733)

(2,653)

16,025

12,617

10,403

Cash flow from operating activities

36,935

27,818

(4,648)

(4,232)

(3,679)

Capital expenditure

(12,764)

(11,379)

(151)

(115)

(34)

Investments in joint ventures and associates

(335)

(754)

(41)

(36)

(23)

Investments in equity securities

(98)

(190)

1,122

1,162

571

Proceeds from sale of property, plant and equipment and businesses

5,390

2,395

168

4

159

Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans1

447

1,129

6

108

139

Proceeds from sale of equity securities

145

274

93

110

112

Interest received

302

422

929

799

588

Other investing cash inflows

2,440

2,617

(1,283)

(746)

(665)

Other investing cash outflows

(2,866)

(2,384)

(3,804)

(2,946)

(2,833)

Cash flow from investing activities

(7,339)

(7,871)

(33)

(34)

(176)

Net increase/(decrease) in debt with maturity period within three months

46

236

Other debt:

23

57

4,745

– New borrowings

189

20,986

(4,077)

(3,901)

(2,688)

– Repayments

(13,684)

(12,523)

(788)

(1,162)

(831)

Interest paid

(2,756)

(2,952)

(268)

(57)

419

Derivative financial instruments

(774)

662

4

Change in non-controlling interest

19

(40)

Cash dividends paid to:

(1,812)

(1,310)

(1,236)

– Royal Dutch Shell plc shareholders2

(4,414)

(6,117)

(40)

(140)

(65)

– Non-controlling interest

(305)

(242)

(971)

Repurchases of shares

(1,187)

(1,702)

34

(2)

1

Shares held in trust: net sales/(purchases) and dividends received

(32)

(198)

(7,930)

(6,550)

169

Cash flow from financing activities

(22,900)

(1,892)

(322)

(2)

36

Effects of exchange rate changes on cash and cash equivalents

(453)

(395)

3,969

3,119

7,775

Increase/(decrease) in cash and cash equivalents

6,244

17,659

34,104

30,985

27,939

Cash and cash equivalents at beginning of period

31,830

18,055

38,073

34,104

35,714

Cash and cash....

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