BAKU, Azerbaijan, March 12
By Leman Zeynalova – Trend:
Cash capital expenditure (cash capex) of Royal Dutch Shell was $3.3 billion in 2020, compared with $4.9 billion in 2019, Trend reports citing the company.
Cash capital expenditure in Refining and Trading decreased by $1.3 billion mainly because of cash preservation initiatives (lower capital expenditure spends including turnaround deferrals). In Marketing, cash capital expenditure decreased by $0.3 billion as a result of cash preservation initiatives and reduced spending in US pipelines projects as they are nearing completion. Our cash capital expenditure is expected to be around $4-4.5 billion in 2021.
Segment earnings in 2019 of $6,139 million were 2 percent higher than in 2018. Earnings in 2019 included a net charge of $93 million described above. Earnings in 2018 included a net gain of $231 million, reflecting gains on disposal of assets of $273 million (mainly our Oil Products assets in Argentina and other smaller disposals), a net gain from fair value accounting of commodity derivatives of $224 million, gains from one-off tax items of $91 million (mainly corporate income tax rate changes in the Netherlands and the USA) and other net gains of $50 million (which included a one-off gain from the Ontario cap-and-trade scheme).
These were partly offset by impairment charges of $309 million and redundancy and restructuring charges of $98 million. Excluding the impact of these items, earnings in 2019 were $6,231 million, compared with $5,794 million in 2018. Marketing accounted for 75% of these 2019 earnings, Refining for 4% and Trading & Supply for 21%. The increase in Oil Products earnings, excluding the net charge, was $437 million (8%) compared with 2018. The increase was driven by higher Marketing margins (around $500 million), benefit from foreign exchange (around $250 million) and the change in accounting policy IFRS 16 (around $140 million). This was partly offset by lower Refining and Trading margins (around $400 million) and other impacts resulting in a net charge of around $50 million.
Marketing margins benefited from stronger unit margins. These were partly offset by lower earnings from Raízen, the joint venture (Shell interest 50%) in Brazil, caused by adverse foreign exchange and lower fuel margins. Refining and Trading margins were lower than in 2018, mainly because of lower realised refining margins caused by adverse price variance across all regions, driven by lower global demand growth and an increase in worldwide refining capacity.
---
Follow the author on Twitter: @Lyaman_Zeyn