Shell has reported strong performance in fourth-quarter 2018 results
Editors Note: Included below is an edited view of Shell's report, referencing upstream related results. For the full report, please visit the company's website.
THE HAGUE -- Shell's CFO Jessica Uhl has delivered a video presentation outlining the company's fourth-quarter 2018 results. Below is a transcript of the webcast. In addition, the CEO Ben van Beurden has commented on the results, below.
CFO Statement
We are reporting another set of strong financials for the fourth quarter of 2018.
Before I share the quarterly numbers, let me reflect on how we've demonstrated delivery against our strategy throughout the full year. Shell has delivered a very strong financial performance in 2018, with cash flow from operations of $49.6 billion, excluding working capital movements.
We’ve delivered on our promises for the year. Completing the $30 billion divestment program, starting-up key growth projects, while also maintaining discipline on capital investment. We paid our entire dividend in cash, further reduced our debt and launched our share buy-back program, with $4.5 billion in shares repurchased so far. We will continue with a strong delivery focus in 2019, with a disciplined approach to capital investment and growing cash flow and returns.
Our strategy to deliver a world class investment case is working.
In the United States, we started up our fourth alpha olefins unit at our Geismar facility, increasing capacity by 425,000 tonnes a year. In the North Sea, our upstream business started up Clair Phase II and in Australia, our Prelude floating LNG facility had first gas in from wells and is progressing with commissioning and start-up.
Now, let me take you through the key numbers of the fourth quarter of 2018.
- $12.9 billion of cash flow from operations excluding working capital movements.
- $16.7 billion of free cash flow.
- $5.7 billion of earnings on a current cost of supplies basis, excluding identified items.
All of this at an average Brent price of $69/bbl.
Return on average capital employed was 7.6%.
Gearing at the end of the year was 20.3%, reflecting a reduction in our net debt of $14.5 billion over the course of the year.
2018 was a great year. A year of delivery. Our relentless focus on value, project delivery and competitiveness means we’ve delivered strong returns and cash flow from our upgraded portfolio.
Our focus for 2019 and beyond remains the same and I’m confident we can deliver a world-class investment case.
CEO statement
Royal Dutch Shell CEO Ben van Beurden commented:
“Shell delivered a very strong financial performance in 2018, with cash flow from operations of $49.6 billion, excluding working capital movements. We delivered on our promises for the year, including the completion of the $30 billion divestment program and starting up key growth projects while maintaining discipline on capital investment. We paid our entire dividend in cash, further reduced our debt and launched our share buyback program, with $4.5 billion in shares repurchased so far.
We will continue with a strong delivery focus in 2019, with a disciplined approach to capital investment and growing both our cash flow and returns. Our strategy to deliver a world-class investment case is working.”
