Segment earnings in 2021 of $1,390 million were 72% higher than in 2020. Earnings in 2021 included a net charge of $364 million, compared with a net charge in 2020 of $154 million, which is described below.
Excluding the impact of these charges, earnings in 2021 were $1,753 million, compared with $962 million in 2020.
Chemicals earnings, excluding the net charges (described below), increased by $792 million, or 82%, compared with 2020. This was driven by higher margins in base chemicals and intermediates (around $800 million) from a stronger price environment, and favourable deferred tax movements (around $200 million), partly offset by higher operating expenses (around $200 million) driven by the impact of Hurricane Ida.
Segment earnings in 2021 included a net charge of $364 million.
- impairment charges of $301 million (mainly due to divestment of the Mobile and Deer Park refineries in the USA and the closure of a production unit on Jurong Island, Singapore);
- redundancy and restructuring costs of $21 million;
- other net charges of $38 million (mainly legal provision); and
- net loss from disposal of assets of $12 million.
These charges were partly offset by a net gain from fair value accounting of commodity derivatives of $8 million.
Segment earnings in 2020 included a net charge of $154 million.
- impairment charges of $4 million;
- costs related to restructuring of $38 million (various initiatives across Chemicals);
- net loss from disposal of assets of $1 million; and
- other net charges of $115 million (mainly legal provision).
These charges were partly offset by a net gain from fair value accounting of commodity derivatives of $4 million.
Prior year earnings summary
Our earnings summary for the financial year ended December 31, 2020, compared with the financial year ended December 31, 2019, can be found in the Annual Report and Accounts and Form 20-F (page 57) for the year ended December 31, 2020, as filed with the Registrar of Companies for England and Wales and the US Securities and Exchange Commission, respectively.