Shell Q3 chemicals earnings hit by weak prices, pandemic impact

Author: Nigel Davis

2020/10/29

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