SHELL PLC 4th Quarter 2022 and Full year unaudited results
SHELL PLC
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*SUMMARY OF UNAUDITED RESULTS*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* *%¹* *Reference* *2022* *2021* **%**
10,409 6,743 11,461 +54 Income/(loss) attributable to Shell plc shareholders 42,309 20,101 +110
9,814 9,454 6,391 +4 Adjusted Earnings A 39,870 19,289 +107
20,600 21,512 16,349 -4 Adjusted EBITDA A 84,289 55,004 +53
22,404 12,539 8,170 +79 Cash flow from operating activities 68,413 45,104 +52
(6,918) (5,049) 2,579 Cash flow from investing activities (22,448) (4,761)
15,486 7,490 10,749 Free cash flow G 45,965 40,343
7,319 5,426 6,500 Cash capital expenditure C 24,833 19,698
11,114 9,359 9,701 +19 Operating expenses F 39,477 35,964 +10
11,037 9,893 9,386 +12 Underlying operating expenses F 39,456 35,309 +12
16.7% 17.3% 8.8% ROACE on a Net income basis D 16.7% 8.8%
15.8% 14.7% 8.5% ROACE on an Adjusted Earnings plus Non-controlling interest (NCI) basis D 15.8% 8.5%
44,838 48,343 52,556 Net debt E 44,838 52,556
18.9% 20.3% 23.1% Gearing E 18.9% 23.1%
2,831 2,766 3,142 +2 Total production available for sale (thousand boe/d) 2,864 3,237 -12
1.47 0.93 1.49 +58 Basic earnings per share ($) 5.76 2.59 +122
1.39 1.30 0.83 +7 Adjusted Earnings per share ($) B 5.43 2.49 +118
0.2875 0.2500 0.2400 +15 Dividend per share ($) 1.0375 0.8935 +16
1.Q4 on Q3 change
Quarter Analysis1
*Income attributable to Shell plc shareholders*, compared with the third quarter 2022, mainly reflected higher LNG trading and optimisation results, favourable deferred tax movements, partly offset by lower realised oil and gas prices, and higher operating expenses.
Fourth quarter 2022 income attributable to Shell plc shareholders also included net gains of $4.2 billion due to the fair value accounting of commodity derivatives, partly offset by charges of $1.9 billion related to the EU solidarity contribution and the UK Energy Profits Levy, and impairment charges of $0.7 billion. These gains and losses are included in identified items amounting to a net gain of $1.5 billion in the quarter. This compares with identified items in the third quarter 2022 which amounted to a net charge of $1.4 billion.
Adjusted Earnings and* *Adjusted EBITDA2 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for the above identified items and the cost of supplies adjustment of positive $0.9 billion.
Cash flow from operating activities for the fourth quarter 2022 was $22.4 billion, and included working capital inflows of $10.4 billion, and tax payments of $4.4 billion. The working capital inflows were mainly driven by higher initial margin inflows, lower prices on crude inventories, a decrease in accounts receivable, and cash relating to joint ventures.
*Cash flow from investing activities *for the quarter was an outflow of $6.9 billion and included capital expenditure of $6.4 billion.
*Net debt and Gearing: *At the end of the fourth quarter 2022, net debt was $44.8 billion, compared with $48.3 billion at the end of the third quarter 2022, mainly reflecting higher free cash flow. Gearing was 18.9% at the end of the fourth quarter 2022, compared with 20.3% at the end of the third quarter 2022, driven by net debt reduction and higher income which resulted in higher equity.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*Shareholder distributions*
Total shareholder distributions in the quarter amounted to $6.3 billion. Dividends declared to Shell plc shareholders for the fourth quarter 2022 amount to $0.2875 per share. Shell has now completed the $4 billion of share buybacks announced in the third quarter 2022 results announcement. Today, Shell announces a share buyback programme of $4 billion which is expected to be completed by the first quarter 2023 results announcement.
Full Year Analysis1
Full year income attributable to Shell plc shareholders, compared with the full year 2021, reflected higher realised prices, higher refining margins, and higher trading and optimisation results (mainly related to Integrated Gas, Chemicals and Products and Renewables and Energy Solutions), partly offset by lower volumes, and lower chemicals margins.
Full year 2022 income attributable to Shell plc shareholders also included net gains of $3.4 billion due to the fair value accounting of commodity derivatives, charges of $2.3 billion related to the EU solidarity contribution and the UK Energy Profits Levy, and net impairment reversals of $0.7 billion. These gains and losses are included in identified items amounting to a net gain of $1.2 billion in the full year 2022. This compares with identified items in the full year 2021 which amounted to a net charge of $2.2 billion.
Adjusted Earnings and* *Adjusted EBITDA2 for the full year 2022 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for identified items and the cost of supplies adjustment of negative $1.2 billion.
Cash flow from operating activities for the full year 2022 was $68.4 billion, and reflected working capital outflows of $5.4 billion, and tax payments of $13.1 billion.
*Cash flow from investing activities *for the full year 2022 was an outflow of $22.4 billion and included capital expenditure of $22.6 billion.
This announcement, together with supplementary financial and operational disclosure and a separate press release for this quarter, is available at www.shell.com/investors3.
1. All earnings amounts are shown post-tax, unless stated otherwise.
2. Adjusted EBITDA is without taxation.
3. Not incorporated by reference.
**FOURTH QUARTER 2022 PORTFOLIO DEVELOPMENTS**
*Withdrawal from Russian oil and gas activities*
We refer to Note 8 to the Condensed Consolidated Financial Statements.
*Integrated Gas*
In October 2022, QatarEnergy selected us as a partner in the North Field South LNG project in Qatar. Shell will obtain a 9.375% participating interest in the 16 mtpa project.
*Upstream*
In November 2022, we completed the sale of our 100% shareholding in Shell Philippines Exploration B.V. to Malampaya Energy XP Pte Ltd.
In December 2022, we announced that Sarawak Shell Berhad, a subsidiary of Shell plc, had agreed to sell its stake in two offshore production-sharing contracts in the Baram Delta to Petroleum Sarawak Exploration & Production Sdn. Bhd.
*Marketing*
In November 2022, we agreed to acquire 100% shareholding of Nature Energy Biogas A/S for nearly $2 billion. The transaction is subject to regulatory approvals and is expected to close in the first quarter 2023.
*Chemicals and Products*
In October 2022, we announced that Shell USA, Inc. and Shell Midstream Partners, L.P. had completed the definitive agreement and plan of merger announced in July 2022, pursuant to which Shell USA, Inc. acquired all of the common units representing limited partner interests in Shell Midstream Partners, L.P. not held by Shell USA, Inc. or its affiliates.
In November 2022, we announced the commencement of operations at our Pennsylvania Chemical project, Shell Polymers Monaca.
*Renewables and Energy Solutions*
In December 2022, we announced that Shell and Eneco had won the tender to develop a 760 MW offshore wind farm at Hollandse Kust (west) VI in the Netherlands.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*PERFORMANCE BY SEGMENT*
*INTEGRATED GAS*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* **%¹** *Reference* *2022* *2021* **%**
5,293 5,736 4,771 -8 Segment earnings 22,212 8,060 +176
(675) 3,417 735 Of which: Identified items A 6,075 (988)
5,968 2,319 4,036 +157 Adjusted Earnings A 16,137 9,048 +78
8,332 5,393 6,091 +55 Adjusted EBITDA A 26,569 16,754 +59
6,409 6,664 6,542 -4 Cash flow from operating activities 27,692 13,210 +110
1,527 956 1,014 Cash capital expenditure C 4,265 3,502
123 123 154 Liquids production available for sale (thousand b/d) 128 169 -25
4,607 4,645 4,777 -1 Natural gas production available for sale (million scf/d) 4,600 4,842 -5
917 924 978 -1 Total production available for sale (thousand boe/d) 921 1,004 -8
6.78 7.24 7.94 -6 LNG liquefaction volumes (million tonnes) 29.68 30.98 -4
16.82 15.66 16.72 +7 LNG sales volumes (million tonnes) 65.98 64.20 +3
1.Q4 on Q3 change
The Integrated Gas segment includes liquefied natural gas (LNG), conversion of natural gas into gas-to-liquids (GTL) fuels and other products. The segment includes natural gas and liquids exploration and extraction, and the operation of the upstream and midstream infrastructure necessary to deliver gas and liquids to market as well as the marketing, trading and optimisation of LNG, including LNG as a fuel for heavy-duty vehicles.
Quarter Analysis*1*
*Segment earnings*, compared with the third quarter 2022, reflected the net effect of higher contributions from trading and optimisation and realised prices (increase of $2,855 million), and favourable deferred tax movements (increase of $516 million), partly offset by lower volumes (decrease of $363 million) mainly reflecting longer than expected maintenance at Prelude and operational issues at QGC. The trading and optimisation contributions were driven by seasonality combined with capturing optimisation opportunities generated through the scale and scope of our LNG trading portfolio.
Fourth quarter 2022 segment earnings also included charges of $708 million due to the fair value accounting of commodity derivatives. As part of Shell's normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases and sales. As these commodity derivatives are measured at fair value, this creates an accounting mismatch over periods. These charges are part of identified items and compare with the third quarter 2022 which included gains of $3,419 million due to the fair value accounting of commodity derivatives.
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.
Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, partly offset by net cash outflows related to derivatives (outflow of $949 million), and tax payments (outflow of $712 million).
Total oil and gas production, compared with the third quarter 2022, decreased by 1% mainly due to longer maintenance at Prelude, and operational issues at QGC, partly offset by a comparative gain related to "Protected Industrial Actions" at Prelude in the third quarter. LNG liquefaction volumes decreased by 6% mainly due to higher unplanned maintenance, and lower feedgas supply, partly offset by a comparative gain related to "Protected Industrial Actions" at Prelude in the third quarter.
Full Year Analysis*1*
Segment earnings, compared with the full year 2021, reflected the combined effect of higher realised prices and higher contributions from trading and optimisation (increase of $8,588 million), partly offset by lower volumes (decrease of $1,295 million) and higher operating expenses (increase of $478 million).
Full year 2022 segment earnings also included gains of $6,273 million due to the fair value accounting of commodity derivatives and net impairment reversals of $779 million, partly offset by other impacts of $608 million, which mainly comprised loan write-downs, and charges of $387 million due to provisions for onerous contracts. These gains and losses are part of identified items and compare with the full year 2021 which included losses of $1,423 million due to the fair value accounting of commodity derivatives and impairment charges of $395 million, partly offset by gains of $1,097 million related to the sale of assets.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.
Cash flow from operating activities for the full year 2022 was primarily driven by Adjusted EBITDA and net cash inflows related to derivatives (inflow of $6,104 million), partly offset by tax payments (outflow of $2,824 million) and working capital movements (outflow of $1,412 million).
Total oil and gas production, compared with the full year 2021, decreased by 8% mainly due to derecognition of Sakhalin-related volumes, production-sharing contract effects, partly offset by new field ramp-up in Trinidad and Tobago. LNG liquefaction volumes decreased by 4% mainly due to the derecognition of Sakhalin-related volumes, and lower feedgas supply, partly offset by lower maintenance.
1. All earnings amounts are shown post-tax, unless stated otherwise.
2. Adjusted EBITDA is without taxation.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*UPSTREAM*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* **%¹** *Reference* *2022* *2021* **%**
1,380 5,357 4,914 -74 Segment earnings 16,223 9,603 +69
(1,681) (539) 2,077 Of which: Identified items A (1,096) 1,587
3,061 5,896 2,838 -48 Adjusted Earnings A 17,319 8,015 +116
9,418 12,539 8,446 -25 Adjusted EBITDA A 42,100 27,170 +55
7,224 8,343 6,974 -13 Cash flow from operating activities 29,641 21,562 +37
1,845 1,733 1,504 Cash capital expenditure C 8,143 6,168
1,331 1,273 1,456 +5 Liquids production available for sale (thousand b/d) 1,333 1,515 -12
3,067 2,995 3,799 +2 Natural gas production available for sale (million scf/d) 3,272 3,845 -15
1,859 1,789 2,110 +4 Total production available for sale (thousand boe/d) 1,897 2,178 -13
1.Q4 on Q3 change
The Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas, and operates the infrastructure necessary to deliver them to the market.
Quarter Analysis1
Segment earnings, compared with the third quarter 2022, were mainly driven by lower oil and gas prices (decrease of $1,849 million) and the comparative adverse impacts of the one-off non-cash provision release (decrease of $503 million) and storage transfer effects, included in the share of profit of joint ventures and associates (decrease of $609 million), in the third quarter.
Fourth quarter 2022 segment earnings also included charges of $1,385 million relating to the EU solidarity contribution and $441 million relating to the UK Energy Profits Levy, partly offset by gains of $304 million due to the fair value accounting of commodity derivatives. These gains and losses are part of identified items, and compare with the third quarter 2022 which included a gain of $312 million due to the impact of the discount rate change on provisions and charges of $361 million relating to the UK Energy Profits Levy and an impairment charge of $303 million.
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.
Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, partly offset by tax payments of $3,364 million.
Total production, compared with the third quarter 2022, increased mainly due to lower scheduled maintenance and lower unscheduled deferment.
Full Year Analysis1
Segment earnings, compared with the full year 2021, mainly reflected higher realised oil and gas prices (increase of $8,838 million) and a gain of $1,066 million relating to storage and working gas transfer effects, partly offset by lower volumes (reduction of $2,458 million), mainly as a result of divestments.
Full year 2022 segment earnings also included a gain from net impairment reversals of $853 million and charges of $1,385 million relating to the EU solidarity contribution and $802 million relating to the UK Energy Profits Levy. These gains and losses are part of identified items, and compare with the full year 2021 which included a net gain of $3,261 million related to the sale of assets (mainly related to the sale of the Permian business in the USA), partly offset by impairment charges of $633 million, losses of $393 million due to the fair value accounting of commodity derivatives, and legal provisions of $287 million.
*Adjusted Earnings and Adjusted EBITDA**2* were driven by the same factors as the segment earnings and adjusted for identified items.
Cash flow from operating activities* *for the full year 2022 was primarily driven by Adjusted EBITDA, partly offset by the timing impact of dividends from joint ventures and associates of $2,650 million and tax payments of $9,423 million.
Total production, compared with the full year 2021, decreased due to the impact of divestments and scheduled maintenance. The impact of field decline was more than offset by growth from new fields.
1. All earnings amounts are shown post-tax, unless stated otherwise.
2. Adjusted EBITDA is without taxation.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*MARKETING*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* **%¹** *Reference* *2022* *2021* **%**
375 757 471 -51 Segment earnings² 2,133 3,536 -40
(72) (63) (140) Of which: Identified items A (622) 68
446 820 611 -46 Adjusted Earnings² A 2,754 3,468 -21
1,045 1,505 1,125 -31 Adjusted EBITDA2 A 5,324 6,021 -12
1,062 2,299 1,218 -54 Cash flow from operating activities 2,376 5,019 -53
1,993 746 829 Cash capital expenditure C 4,831 2,273
2,543 2,581 2,522 -1 Marketing sales volumes (thousand b/d) 2,503 2,433 +3
1. Q4 on Q3 change
2. Segment earnings, Adjusted Earnings and Adjusted EBITDA are presented on a CCS basis (see Note 2).
The Marketing segment comprises the Mobility, Lubricants, and Sectors & Decarbonisation businesses. The Mobility business operates Shell’s retail network including electric vehicle charging services. The Lubricants business produces, markets and sells lubricants for road transport, and machinery used in manufacturing, mining, power generation, agriculture and construction. The Sectors & Decarbonisation business sells fuels, speciality products and services including low-carbon energy solutions to a broad range of commercial customers including the aviation, shipping, commercial road transport and agricultural sectors.
Quarter Analysis1
Segment earnings, compared with the third quarter 2022, reflected lower Marketing margins (decrease of $201 million) mainly driven by seasonal impacts in Mobility, and higher operating expenses (increase of $177 million).
Fourth quarter 2022 segment earnings also included impairment charges of $85 million. These charges are part of identified items.
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.
Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, working capital inflows of $231 million, and dividends from joint ventures and associates of $108 million, partly offset by tax payments of $160 million and non-cash cost-of-sales adjustments of $123 million.
Marketing sales volumes (comprising hydrocarbon sales), compared with the third quarter 2022, decreased mainly due to seasonal effects.
Full Year Analysis1
Segment earnings, compared with the full year 2021, reflected higher operating expenses (increase of $704 million) including the effects of higher volumes, partly offset by higher Marketing margins (increase of $171 million).
Full year 2022 segment earnings also included net losses of $321 million from impairments, net losses of $135 million related to the sale of assets, and provisions for onerous contracts of $62 million. These net losses are part of identified items and compare with the full year 2021 which included gains of $290 million mainly related to the dilution of Shell's interest in the Raizen joint venture, charges of $109 million related to redundancy and restructuring costs, and impairment charges of $106 million.
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.
Cash flow from operating activities* *for the full year 2022 was primarily driven by Adjusted EBITDA, and non-cash cost-of-sales adjustments of $568 million, partly offset by working capital outflows of $3,074 million, and tax payments of $494 million.
Marketing sales volumes (comprising hydrocarbon sales), compared with the full year 2021, increased mainly due to demand recovery in Aviation (within Sectors & Decarbonisation).
1. All earnings amounts are shown post-tax, unless stated otherwise.
2. Adjusted EBITDA is without taxation.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*CHEMICALS AND PRODUCTS*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* **%¹** *Reference* *2022* *2021* **%**
332 980 (3) -66 Segment earnings² 4,515 404 +1018
(412) 208 127 Of which: Identified items A (204) (1,712)
744 772 (130) -4 Adjusted Earnings² A 4,719 2,115 +123
1,574 1,797 741 -12 Adjusted EBITDA2 A 8,561 5,635 +52
3,119 3,385 (1,572) -8 Cash flow from operating activities 12,906 3,709 +248
786 828 1,410 Cash capital expenditure C 3,838 5,175
1,434 1,434 1,348 Refinery processing intake (thousand b/d) 1,402 1,639 -14
1,800 1,803 1,929 Refining & Trading sales volumes (thousand b/d) 1,700 2,026 -16
3,017 2,879 3,475 +5 Chemicals sales volumes (thousand tonnes) 12,281 14,216 -14
1. Q4 on Q3 change
2. Segment earnings, Adjusted Earnings and Adjusted EBITDA are presented on a CCS basis (see Note 2).
The Chemicals and Products segment includes chemicals manufacturing plants with their own marketing network, and refineries which turn crude oil and other feedstocks into a range of oil products which are moved and marketed around the world for domestic, industrial and transport use. The segment also includes the Pipeline business, Trading of crude oil, oil products and petrochemicals, and Oil Sands activities (the extraction of bitumen from mined oil sands and its conversion into synthetic crude oil).
Quarter Analysis1
Segment earnings, compared with the third quarter 2022, reflected higher operating expenses (increase of $213 million), and higher depreciation charges (increase of $101 million), with both operating expenses and depreciation including the start-up of operations at Shell Polymers Monaca. These increases were partly offset by favourable deferred tax movements (increase of $230 million). Margins were in line with the third quarter 2022, with higher Refining margins offset by lower contributions from trading and optimisation.
Fourth quarter 2022* *segment earnings also included losses of $214 million due to the fair value accounting of commodity derivatives, legal provisions of $86 million, impairment charges of $84 million and tax charges relating to the EU solidarity contribution of $74 million. These charges are part of identified items, and compare with the third quarter 2022 which included gains of $226 million due to the fair value accounting of commodity derivatives.
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. Adjusted Earnings for the fourth quarter were a loss of $688 million for Chemicals and earnings of $1,432 million for Products.
Cash flow from operating activities for the quarter was primarily driven by working capital inflows of $3,074 million, Adjusted EBITDA, and dividends from joint ventures and associates of $176 million, partly offset by non-cash cost-of-sales adjustments of $1,108 million, the timing of payments relating to emissions and biofuel programmes of $384 million, and tax payments of $217 million.
Chemicals manufacturing plant utilisation was 75% (previous methodology: 69%) compared with 76% (previous methodology: 70%) in the third quarter 2022.
Refinery utilisation was 90% (previous methodology: 77%) compared with 88% (previous methodology: 79%) in the third quarter 2022, due to lower unplanned maintenance.
With effect from the second quarter 2022, the methodology applied in calculating both *Chemicals manufacturing plant utilisation* and *Refinery utilisation* has been revised to further align with industry disclosures. The revisions include moving from stream days capacity (defined as the maximum throughput, excluding the impact of maintenance or operational outages) to calendar days capacity (defined as the throughput including typical limitations such as maintenance over an extended period of time). Furthermore, Refinery utilisation is now specific to the capacity of the crude distillation unit (except for Scotford Refinery which uses the capacity of the hydrocracker), and no longer the capacity across all refinery units.
Full Year Analysis1
Segment earnings,* *compared with the full year 2021, reflected higher Products margins (increase of $5,721 million) reflecting higher Refining margins and higher contributions from trading and optimisation, lower tax charges (decrease of $300 million), as well as lower depreciation charges (decrease of $175 million). These were partly offset by lower Chemicals margins (decrease of $2,705 million) and higher operating expenses (increase of $822 million).
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
Full year 2022 segment earnings also included impairment charges of $226 million, legal provisions of $149 million, losses of $147 million related to the fair value accounting of commodity derivatives, tax charges relating to the EU solidarity contribution of $74 million, gains of $223 million related to the sale of assets, and gains of $104 million related to the remeasurement of redundancy and restructuring costs. These gains and losses are part of identified items, and compare with the full year 2021 which included impairment charges of $1,814 million, charges of $82 million related to provisions for onerous contracts, and gains of $160 million related to the fair value accounting of commodity derivatives.
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. Adjusted Earnings for the full year 2022 were a loss of $1,371 million for Chemicals and earnings of $6,090 million for Products.
Cash flow from operating activities* *for the full year 2022 was primarily driven by Adjusted EBITDA, non-cash cost-of-sales adjustments of $1,187 million, the timing of payments relating to emissions and biofuel programmes of $1,169 million, working capital inflows of $757 million, dividends from joint ventures and associates of $694 million, and a long-term payable for a volume purchase contract of $507 million.
Chemicals manufacturing plant utilisation was 79% (previous methodology: 72%) compared with 85% (previous methodology: 78%) in the full year 2021, due to higher turnarounds and optimisation for the low-margin environment during the full year 2022.
Refinery utilisation was 86% (previous methodology: 74%) compared with 80% (previous methodology: 72%) in the full year 2021, due to lower unplanned maintenance, and lower turnarounds.
1. All earnings amounts are shown post-tax, unless stated otherwise.
2. Adjusted EBITDA is without taxation.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*RENEWABLES AND ENERGY SOLUTIONS*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* **%¹** *Reference* *2022* *2021* **%**
4,673 (4,023) 1,894 +216 Segment earnings (1,059) (1,514) +30
4,379 (4,406) 1,851 Of which: Identified items A (2,805) (1,272)
293 383 43 -23 Adjusted Earnings A 1,745 (243) +819
396 530 80 -25 Adjusted EBITDA A 2,459 (21) +11923
2,674 (8,051) (5,236) +133 Cash flow from operating activities (6,394) 451 -1518
1,076 1,086 1,617 Cash capital expenditure C 3,469 2,359
66 67 59 -2 External power sales (terawatt hours)2 243 247 -2
241 157 249 +53 Sales of pipeline gas to end-use customers (terawatt hours)3 843 899 -6
1.Q4 on Q3 change
2.Physical power sales to third parties; excluding financial trades and physical trade with brokers, investors, financial institutions, trading platforms, and wholesale traders.
3.Physical natural gas sales to third parties; excluding financial trades and physical trade with brokers, investors, financial institutions, trading platforms, and wholesale traders. Excluding sales of natural gas by other segments and LNG sales.
The Renewables and Energy Solutions segment includes Shell’s Integrated Power activities, comprising electricity generation, marketing, trading and optimisation of power and pipeline gas, and digitally enabled customer solutions. The segment also includes production and marketing of hydrogen, development of commercial carbon capture & storage hubs, trading of carbon credits and investment in nature-based projects that avoid or reduce carbon.
*Quarter Analysis*1
*Segment earnings*, compared with the third quarter 2022, reflected higher trading and optimisation results mainly driven by the European market, partly offset by the American market as significant price volatility continued. The fourth quarter 2022 also included higher operating expenses.
Fourth quarter 2022* *segment earnings also included net gains of $4,748 million due to the fair value accounting of commodity derivatives, and impairment charges of $361 million mainly in Europe. As part of Shell's normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory. As these commodity derivatives are measured at fair value, this creates an accounting mismatch over periods. These net gains are part of identified items and compare with the third quarter 2022 which included net losses of $4,414 million due to the fair value accounting of commodity derivatives.
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.
*Cash flow from operating activities *for the quarter was primarily driven by working capital movements (inflow of $3,579 million), and Adjusted EBITDA, partly offset by net cash outflows related to derivatives (outflow of $1,322 million).
*Full Year Analysis*1
Segment earnings, compared with the full year 2021, reflected higher trading and optimisation results for gas and power mainly in Europe driven by price volatility, partly offset by higher operating expenses as a result of business growth and acquisitions.
Full year 2022 segment earnings also included net losses of $2,443 million due to the fair value accounting of commodity derivatives, and impairment charges of $361 million mainly in Europe. These losses are part of identified items and compare with the full year 2021 which included net losses of $1,219 million due to the fair value accounting of commodity derivatives.
Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.
Cash flow from operating activities for the full year 2022 was primarily driven by net cash outflows related to derivatives (outflow of $4,998 million), and working capital movements (outflow of $3,676 million), partly offset by Adjusted EBITDA.
1. All earnings amounts are shown post-tax, unless stated otherwise.
2. Adjusted EBITDA is without taxation.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
**Additional Growth Measures**
*Quarters* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* **%¹** *2022* *2021* *%* Renewable power generation capacity (gigawatt):
2.2 2.2 0.7 +2 – In operation2 2.2 0.7 +220
4.2 3.0 2.3 +38 – Under construction and/or committed for sale3 4.2 2.3 +85
1. Q4 on Q3 change
2. Shell's equity share of renewable generation capacity post commercial operation date. It excludes Shell's equity share of associates where information cannot be obtained and prior period comparatives have been revised accordingly.
3. Shell's equity share of renewable generation capacity under construction and/or committed for sale under long-term offtake agreements (PPA). It excludes Shell's equity share of associates where information cannot be obtained and prior period comparatives have been revised accordingly.
*CORPORATE*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* *Reference* *2022* *2021*
(654) (543) (859) Segment earnings (2,461) (2,606)
(28) 28 30 Of which: Identified items A (90) 81
(626) (571) (889) Adjusted Earnings A (2,371) (2,686)
(164) (251) (133) Adjusted EBITDA A (725) (554)
1,916 (100) 245 Cash flow from operating activities 2,192 1,154
The Corporate segment covers the non-operating activities supporting Shell, comprising Shell’s holdings and treasury organisation, its self-insurance activities and its headquarters and central functions. All finance expense and income and related taxes are included in Corporate segment earnings rather than in the earnings of business segments.
Quarter Analysis1
Segment earnings, compared with the third quarter 2022, reflected unfavourable movements in the net interest expense, partly offset by favourable currency exchange rate effects.
Adjusted EBITDA2* *was mainly driven by favourable currency exchange effects.
Full Year Analysis1
Segment earnings, compared with the full year 2021, reflected by favourable movements in the net interest expense, partly offset by lower tax credits and unfavourable currency exchange rate effects.
Adjusted EBITDA* *was mainly driven by unfavourable currency exchange effects.
1. All earnings amounts are shown post-tax, unless stated otherwise.
2. Adjusted EBITDA is without taxation.
*PRELIMINARY RESERVES UPDATE*
When final volumes are reported in the 2022 Annual Report and Accounts and 2022 Form 20-F, Shell expects that SEC proved oil and gas reserves additions before taking into account production will be approximately 1.3 billion boe, and that 2022 production will be approximately 1.1 billion boe. As a result, total proved reserves on an SEC basis are expected to be approximately 9.6 billion boe. Acquisitions and divestments of 2022 reserves are expected to account for a net increase of approximately 1.0 billion boe.
The proved Reserves Replacement Ratio on an SEC basis is expected to be 120% for the year and 58% for the 3-year average. Excluding the impact of acquisitions and divestments, the proved Reserves Replacement Ratio is expected to be 26% for the year and 39% for the 3-year average.
Further information will be provided in the 2022 Annual Report and Accounts and 2022 Form 20-F, which are expected to be filed in March 2023.
**OUTLOOK FOR THE FIRST QUARTER 2023**
Cash capital expenditure is expected to be within the $23 - 27 billion range for the full year.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
Integrated Gas production is expected to be approximately 910 - 970 thousand boe/d. LNG liquefaction volumes are expected to be approximately 6.6 - 7.2 million tonnes.
Upstream production is expected to be approximately 1,750 - 1,950 thousand boe/d.
Marketing sales volumes are expected to be approximately 2,150 - 2,650 thousand b/d.
Refinery utilisation is expected to be approximately 87% - 95%. Chemicals manufacturing plant utilisation is expected to be approximately 68% - 76%. The utilisation ranges presented use the revised methodology (please refer to 'Chemicals and Products' in the 'Performance by Segment' section).
Corporate Adjusted Earnings are expected to be a net expense of approximately $400 - $600 million in the first quarter 2023 and a net expense of approximately $1,700 - $2,300 million for the full year 2023. This excludes the impact of currency exchange rate effects.
*FORTHCOMING EVENTS*
The “Shell LNG Outlook 2023” event is scheduled on February 16, 2023. The “Annual ESG Update” event is scheduled on March 22, 2023. First quarter 2023 results and dividends are scheduled to be announced on May 4, 2023. The Annual General Meeting is scheduled on May 23, 2023. The “Capital Markets Day 2023” event is scheduled on June 14, 2023. Second quarter 2023 and half year results and dividends are scheduled to be announced on July 27, 2023. Third quarter 2023 results and dividends are scheduled to be announced on November 2, 2023.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
**UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
*CONSOLIDATED STATEMENT OF INCOME*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* *2022* *2021*
101,303 95,749 85,280 Revenue1, 4 381,314 261,504
(268) 2,512 975 Share of profit/(loss) of joint ventures and associates4 3,972 4,097
160 498 3,968 Interest and other income/(expenses)2, 4 915 7,056
101,195 98,759 90,223 Total revenue and other income/(expenses) 386,201 272,657
65,489 70,684 56,566 Purchases 258,488 174,912
7,220 5,910 6,530 Production and manufacturing expenses 25,518 23,822
3,491 3,229 2,867 Selling, distribution and administrative expenses4 12,883 11,328
403 220 304 Research and development 1,075 815
649 424 280 Exploration 1,712 1,423
6,459 6,124 6,445 Depreciation, depletion and amortisation2, 4 18,529 26,921
1,040 734 963 Interest expense 3,181 3,607
84,752 87,324 73,954 Total expenditure 321,387 242,828
16,443 11,435 16,269 Income/(loss) before taxation 64,814 29,829
5,975 4,587 4,665 Taxation charge/(credit) 21,941 9,199
10,469 6,848 11,604 Income/(loss) for the period¹ 42,873 20,630
59 104 144 Income/(loss) attributable to non-controlling interest 565 529
10,409 6,743 11,461 Income/(loss) attributable to Shell plc shareholders 42,309 20,101
1.47 0.93 1.49 Basic earnings per share ($)3 5.76 2.59
1.46 0.92 1.48 Diluted earnings per share ($)3 5.71 2.57
1. See Note 2 “Segment information”.
2. See Note 7 “Other notes to the unaudited Condensed Consolidated Financial Statements”.
3. See Note 3 “Earnings per share”.
4. See Note 8 “Withdrawal from Russian oil and gas activities”.
*CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* *2022* *2021*
10,469 6,848 11,604 Income/(loss) for the period 42,873 20,630 Other comprehensive income/(loss) net of tax: Items that may be reclassified to income in later periods:
2,855 (3,456) (193) – Currency translation differences (2,986) (1,413)
12 (25) (11) – Debt instruments remeasurements (78) (28)
(345) (57) (129) – Cash flow hedging gains/(losses) (232) 21
(264) 183 86 – Net investment hedging gains/(losses) 180 295
(32) 11 (1) – Deferred cost of hedging 200 (39)
77 30 59 – Share of other comprehensive income/(loss) of joint ventures and associates 274 (109)
2,303 (3,315) (190) Total (2,642) (1,273) Items that are not reclassified to income in later periods:
(2,090) 126 604 – Retirement benefits remeasurements 5,466 7,198
(37) (21) 121 – Equity instruments remeasurements (491) 145
(227) 12 30 – Share of other comprehensive income/(loss) of joint ventures and associates (253) 3
(2,354) 117 755 Total 4,722 7,346
(51) (3,198) 564 Other comprehensive income/(loss) for the period 2,080 6,073
10,417 3,649 12,169 Comprehensive income/(loss) for the period 44,953 26,703
114 (38) 118 Comprehensive income/(loss) attributable to non-controlling interest 621 468
10,303 3,687 12,051 Comprehensive income/(loss) attributable to Shell plc shareholders 44,333 26,235
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*CONDENSED CONSOLIDATED BALANCE SHEET*
*$ million* *December 31, 2022* **December 31, 2021**
*Assets*
*Non-current assets*
Intangible assets 25,701 24,693
Property, plant and equipment 198,642 194,932
Joint ventures and associates 23,864 23,415
Investments in securities 3,362 3,797
Deferred tax1 7,815 12,426
Retirement benefits1 10,200 8,471
Trade and other receivables 6,920 7,065
Derivative financial instruments² 582 815 277,087 275,614
*Current assets*
Inventories 31,894 25,258
Trade and other receivables 66,510 53,208
Derivative financial instruments² 24,437 11,369
Cash and cash equivalents 40,246 36,970 163,087 126,805
Assets classified as held for sale1 2,850 *1,960* 165,937 128,765
*Total assets* *443,024 * *404,379 *
*Liabilities*
*Non-current liabilities*
Debt 74,794 80,868
Trade and other payables 3,432 2,075
Derivative financial instruments² 3,563 887
Deferred tax1 16,186 12,547
Retirement benefits1 7,296 11,325
Decommissioning and other provisions1 23,845 25,804 129,117 133,506
*Current liabilities*
Debt 9,001 8,218
Trade and other payables 79,357 63,173
Derivative financial instruments² 23,779 16,311
Income taxes payable 4,869 3,254
Decommissioning and other provisions 2,910 3,338 119,916 94,294
Liabilities directly associated with assets classified as held for sale1 1,395 1,253 121,310 95,547
*Total liabilities* *250,427 * *229,053 *
Equity attributable to Shell plc shareholders 190,471 171,966
Non-controlling interest1 2,126 3,360
*Total equity* *192,597 * *175,326 *
*Total liabilities and equity* *443,024 * *404,379 *
1. See Note 7 “Other notes to the unaudited Condensed Consolidated Financial Statements”.
2. See Note 6 “Derivative financial instruments and debt excluding lease liabilities”.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*CONSOLIDATED STATEMENT OF CHANGES IN EQUITY* *Equity attributable to Shell plc shareholders*
*$ million* *Share capital**1* *Shares held in trust* *Other reserves²* *Retained earnings* *Total* *Non-controlling interest* *Total equity*
*At January 1, 2022* *641 * *(610)* *18,909 * *153,026 * *171,966 * *3,360 * *175,326 *
Comprehensive income/(loss) for the period — — 2,024 42,309 44,333 621 44,953
Transfer from other comprehensive income — — (34) 34 — — —
Dividends³ — — — (7,283) (7,283) (206) (7,489)
Repurchases of shares4 (57) — 57 (18,547) (18,547) — (18,547)
Share-based compensation — (116) 176 131 190 — 190
Other changes — — — (187) (187) (1,650) 5 (1,838)
*At December 31, 2022* *584 * *(727)* *21,131 * *169,482 * *190,471 * *2,126 * *192,597 *
*At January 1, 2021* *651 * *(709)* *12,752 * *142,616 * *155,310 * *3,227 * *158,537 *
Comprehensive income/(loss) for the period — — 6,134 20,101 26,235 468 26,703
Transfer from other comprehensive income — — (45) 45 — — —
Dividends3 — — — (6,321) (6,321) (348) (6,669)
Repurchases of shares (10) — 10 (3,513) (3,513) — (3,513)
Share-based compensation — 99 58 93 250 — 250
Other changes — — — 5 5 13 18
*At December 31, 2021* *641 * *(610)* *18,909 * *153,026 * *171,966 * *3,360 * *175,326 *
1. See Note 4 “Share capital”.
2. See Note 5 “Other reserves”.
3. The amount charged to retained earnings is based on prevailing exchange rates on payment date.
4. Includes shares committed to repurchase under an irrevocable contract and repurchases subject to settlement at the end of the quarter.
5. See Note 7 “Other notes to the unaudited Condensed Consolidated Financial Statements”.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*CONSOLIDATED STATEMENT OF CASH FLOWS*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* *2022* *2021*
16,443 11,435 16,269 Income before taxation for the period 64,814 29,829 Adjustment for:
596 389 819 – Interest expense (net) 2,135 3,096
6,459 6,124 6,445 – Depreciation, depletion and amortisation1 18,529 26,921
395 218 72 – Exploration well write-offs 881 639
(21) (93) (3,679) – Net (gains)/losses on sale and revaluation of non-current assets and businesses (642) (5,995)
268 (2,512) (975) – Share of (profit)/loss of joint ventures and associates (3,972) (4,097)
1,413 814 1,611 – Dividends received from joint ventures and associates 4,398 3,929
2,902 484 (860) – (Increase)/decrease in inventories (8,360) (7,319)
5,179 (98) (6,799) – (Increase)/decrease in current receivables (8,989) (20,567)
2,308 (4,544) 4,688 – Increase/(decrease) in current payables 11,915 17,519
(7,669) 3,334 (6,592) – Derivative financial instruments (2,619) 5,882
135 (87) (27) – Retirement benefits 417 16
218 (744) 176 – Decommissioning and other provisions 35 (76)
(1,850) 1,258 (1,236) – Other1 2,991 803
(4,372) (3,438) (1,743) Tax paid (13,120) (5,476)
*22,404 * **12,539*** * **8,170*** * *Cash flow from operating activities* **68,413*** * **45,104*** *
(6,417) (5,268) (6,236) Capital expenditure (22,600) (19,000)
(860) (95) (145) Investments in joint ventures and associates (1,973) (479)
(42) (63) (120) Investments in equity securities (261) (218)
52 39 8,843 Proceeds from sale of property, plant and equipment and businesses 1,431 14,233
119 203 137 Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans 511 584
65 36 151 Proceeds from sale of equity securities 117 296
401 253 121 Interest received 906 423
518 496 489 Other investing cash inflows 2,060 2,928
(754) (650) (662) Other investing cash outflows (2,641) (3,528)
*(6,918)* *(5,049)* **2,579*** * *Cash flow from investing activities* **(22,448)** **(4,761)**
(248) (206) (32) Net increase/(decrease) in debt with maturity period within three months 318 14 Other debt:
31 103 1,602 – New borrowings 269 1,791
(2,217) (1,171) (7,850) – Repayments (8,460) (21,534)
(1,183) (747) (1,258) Interest paid (3,677) (4,014)
356 (843) (391) Derivative financial instruments (1,799) (1,165)
(1,974) 1 4 — Change in non-controlling interest (1,965) 19 Cash dividends paid to:
(1,785) (1,818) (1,838) – Shell plc shareholders2 (7,405) (6,253)
(42) (54) (42) – Non-controlling interest (206) (348)
(4,474) (4,950) (1,703) Repurchases of shares (18,437) (2,889)
(542) (25) (254) Shares held in trust: net sales/(purchases) and dividends received (593) (285)
*(12,078)* **(9,707)** **(11,764)** *Cash flow from financing activities* **(41,954)** **(34,664)**
860 (774) (87) Effects of exchange rate changes on cash and cash equivalents (736) (539)
*4,268 * **(2,992)** **(1,102)** *Increase/(decrease) in cash and cash equivalents* **3,275*** * **5,140*** *
*35,978 * **38,970*** * **38,073*** * *Cash and cash equivalents at beginning of period* **36,970*** * **31,830*** *
*40,246 * **35,978*** * **36,970*** * *Cash and cash equivalents at end of period* **40,246*** * **36,970*** *
1. See Note 7 “Other notes to the unaudited Condensed Consolidated Financial Statements”.
2. Cash dividends paid represents the payment of net dividends (after deduction of withholding taxes where applicable) and payment of withholding taxes on dividends paid in the previous quarter.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
*1. *Basis of preparation**
These unaudited Condensed Consolidated Financial Statements of Shell plc (“the Company”) and its subsidiaries (collectively referred to as “Shell”) have been prepared on the basis of the same accounting principles as those used in the Company's Annual Report and Accounts (pages 228 to 283) and Form 20-F (pages 204 to 261) for the year ended December 31, 2021 as filed with the Registrar of Companies for England and Wales, the Autoriteit Financiële Markten (the Netherlands) and the US Securities and Exchange Commission, and should be read in conjunction with these filings.
The financial information presented in the unaudited Condensed Consolidated Financial Statements does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 (“the Act”). Statutory accounts for the year ended December 31, 2021 were published in Shell’s Annual Report and Accounts, a copy of which was delivered to the Registrar of Companies for England and Wales, and in Shell's Form 20-F. The auditor’s report on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or 498(3) of the Act. The statutory accounts for the year ended December 31, 2022 will be delivered to the Registrar of Companies for England and Wales in due course.
Key accounting considerations, significant judgements and estimates
Future long-term commodity price assumptions and management’s view on the future development of refining margins represent a significant estimate. Future long-term commodity price assumptions were subject to change in the second quarter 2022. These assumptions continue to apply for impairment testing purposes in the fourth quarter 2022.
The discount rate applied to provisions is reviewed on a regular basis. The discount rate was reviewed and adjusted in the third quarter 2022. See Note 7.
*Changes to IFRS not yet adopted*
IFRS 17 Insurance contracts was issued in 2017, with amendments published in 2020 and 2021, and is required to be adopted for annual reporting periods beginning on or after January 1, 2023. Shell is in the process of implementing the standard. The standard is not expected to have a significant effect on future financial reporting.
*2. *Segment information**
As from January 1, 2022, onwards reporting segments are aligned with Shell’s Powering Progress strategy. The Renewables and Energy Solutions business is now reported separately from Integrated Gas. Oil Products and Chemicals were reorganised into two segments – Marketing and Chemicals and Products. The shales assets in Canada are now reported as part of the Integrated Gas segment instead of the Upstream segment. Prior period comparatives have been revised to conform with current year presentation. The reporting segment changes have no impact at a Shell Group level.
Segment earnings are presented on a current cost of supplies basis (CCS earnings), which is the earnings measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance. On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude the effect of changes in the oil price on inventory carrying amounts. Sales between segments are based on prices generally equivalent to commercially available prices.
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*INFORMATION BY SEGMENT*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* *2022* *2021* *Third-party revenue*
13,802 14,471 12,702 Integrated Gas 54,751 29,922
2,945 1,623 2,605 Upstream 8,352 9,182
28,417 31,965 23,964 Marketing 120,639 83,494
33,480 37,649 33,801 Chemicals and Products 144,342 116,448
22,656 10,031 12,200 Renewables and Energy Solutions 53,190 22,416
4 10 7 Corporate 41 43
*101,303 * *95,749 * *85,280 * *Total third-party revenue¹* *381,314 * *261,504 * *Inter-segment revenue*
5,038 5,666 2,874 Integrated Gas 18,412 8,072
13,229 13,164 10,838 Upstream 52,285 35,789
183 169 69 Marketing 606 253
602 696 491 Chemicals and Products 2,684 1,890
2,035 1,992 2,010 Renewables and Energy Solutions 6,791 4,675
— — — Corporate — — *CCS earnings*
5,293 5,736 4,771 Integrated Gas 22,212 8,060
1,380 5,357 4,914 Upstream 16,223 9,603
375 757 471 Marketing 2,133 3,536
332 980 (3) Chemicals and Products 4,515 404
4,673 (4,023) 1,894 Renewables and Energy Solutions (1,059) (1,514)
(654) (543) (859) Corporate (2,461) (2,606)
*11,399 * *8,264 * *11,187 * *Total CCS earnings* *41,562 * *17,482 *
1.Includes revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. Fourth quarter 2022 included income of $10,371 million (Q3 2022: $440 million loss; Q4 2021: $4,287 million income). This amount includes both the reversal of prior losses of $621 million (Q3 2022: $4,233 million losses; Q4 2021: $2,860 million losses) related to sales contracts and prior losses of $1,032 million (Q3 2022: $4,114 million gains; Q4 2021: $2,476 million gains) related to purchase contracts that were previously recognised and where physical settlement took place in the fourth quarter 2022.
*RECONCILIATION OF INCOME FOR THE PERIOD TO CCS EARNINGS*
*Quarters* *$ million* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* *2022* *2021*
10,409 6,743 11,461 Income/(loss) attributable to Shell plc shareholders 42,309 20,101
59 104 144 Income/(loss) attributable to non-controlling interest 565 529
*10,469 * *6,848 * *11,604 * *Income/(loss) for the period* *42,873 * *20,630 * Current cost of supplies adjustment:
1,210 1,800 (481) Purchases (1,714) (3,772)
(301) (433) 106 Taxation 444 808
22 51 (42) Share of profit/(loss) of joint ventures and associates (41) (184)
*930 * *1,417 * *(417)* *Current cost of supplies adjustment* *(1,311)* *(3,148)* of which:
904 1,354 (380) Attributable to Shell plc shareholders (1,196) (3,029)
27 62 (37) Attributable to non-controlling interest (116) (119)
*11,399 * *8,264 * *11,187 * *CCS earnings* *41,562 * *17,482 * of which:
11,313 8,098 11,081 CCS earnings attributable to Shell plc shareholders 41,113 17,072
86 167 106 CCS earnings attributable to non-controlling interest 449 410
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*SHELL PLC*
4th QUARTER 2022 AND FULL YEAR UNAUDITED RESULTS
*3. *Earnings per share**
*EARNINGS PER SHARE*
*Quarters* *Full year*
*Q4 2022* *Q3 2022* *Q4 2021* *2022* *2021*
10,409 6,743 11,461 Income/(loss) attributable to Shell plc shareholders ($ million) 42,309 20,101 Weighted average number of shares used as the basis for determining:
7,063.9 7,276.7 7,701.9 Basic earnings per share (million) 7,347.5 7,761.7
7,127.2 7,341.3 7,744.3 Diluted earnings per share (million) 7,410.5 7,806.8
*4. *Share capital**
*ISSUED AND FULLY PAID ORDINARY SHARES OF €0.07 EACH**1* *Number of shares* *Nominal value ($ million)* *A* *B* *Ordinary shares* *A* *B* *Ordinary shares* *Total*
*At January 1, 2022* *4,101,239,499 * *3,582,892,954 * *345 * *296 * *641 *
Repurchases of shares before assimilation — (34,106,548)