First quarter 2015 results CFO video comment
Hello, I am Simon Henry, the Chief Financial Officer of Royal Dutch Shell.
Today we announced our quarterly financial results. Let me give you the highlights.
Our first quarter 2015 earnings were $3.2 billion on a clean Current Cost of Supplies basis and earnings per share decreased by 56% from first quarter 2014.
Our cash flow generated from operations was around $7 billion. On a Q1 to Q1 basis we saw a significant decline in Upstream earnings and higher earnings in Downstream.
Earlier this month, we announced a recommended offer to acquire BG. This is an important transaction for Shell.
The combination with BG will accelerate our financial growth strategy, particularly in deep water and liquefied natural gas, and both of these are growth priorities for Shell and areas where the company is already one of the industry leaders.
This is an exciting next step for both companies. And we are looking forward to updating on that when the transaction has closed, which we expect in early 2016.
Returning to our first quarter results.
Upstream underlying earnings were nearly $700 million, a decrease of some $5 billion from year ago levels.
This was a large move and includes a $4.7 billion reduction for the lower oil and gas prices.
Downstream earnings were $2.6 billion, that is 68% higher than year-ago levels, benefiting from stronger refining margin environment and operational performance.
We set out a programme to moderate our investment spending in 2014, with a reduction in both headline and organic spending, and we continue with that approach in 2015.
We now expect spending this year at around $33 billion or less, in other words a $2 billion reduction from the $35 billion ceiling on spending that we set out at the start of the year.
This is a dynamic picture, and has included a series of pragmatic decisions on new opportunities.
It was good to see progress on operating costs, excluding identified items, in the first quarter results, as these fell by almost $1.1 billion, or 10%, on a Q1 to Q1 basis, this was 2/3 exchange rate and 1/3 self-help there is more to come here.
Asset sales in the quarter totaled over $2 billion so far this year.
Dividends are our main route for returning cash to shareholders.
Dividends are confirmed at $0.47 cent per share for the quarter and $1.88 per share for 2015.
Returns to shareholders dividend declared plus buybacks were $14.4 billion over the last 12 months.
All of this underlines our commitment to shareholder returns.
Thank you for listening.