Shell Q3 chemicals earnings hit by weak prices, pandemic impact

LONDON (ICIS)–Shell’s third-quarter chemicals earnings were hit by the weak price environment compounded by the coronavirus pandemic, the Anglo-Dutch energy major said on Thursday.

Shell ($/m)	Revenue	Change	Chemicals earnings*	Change	Chemicals adjusted earnings*	Change
Q3 2020	2,831	-16.7%	131	-37.9%	227	1.3%
Jan-Sept 2020	8,335	-20.9%	441	-20.7%	581	-28%

* Current cost of supply (CCS) basis

– Lower intermediates margins due to lower demand in most segments but relative strength in solvents and polyols

– Favourable deferred tax movements

– Chemicals plant utilisation at 80%, up from 78% in Q3 2019, a period of higher maintenance

– Group attributable net income for the third quarter was $489m, down sharply from $5.88m in Q3 2019.

– Lower realised oil and liquefied natural gas (LNG) prices

– Lower realised margins and production volumes compared with Q3 2019

– Partly offset by lower operating expenses, write-offs, depreciation and strong marketing margins

– Includes an impairment of $1.1bn