Earnings

Earnings 2022-2021

Segment earnings in 2022 were a loss of $1,059 million, compared with a loss of $1,514 million in 2021. The narrowing of the loss was mainly driven by higher prices and contributions from trading, marketing and optimisation results for gas and power (around $1,900 million). This was partly offset by higher operating expenses as a result of business growth and acquisitions (around $900 million), impairment (around $400 million) and tax charges (around $100 million).

Full year 2022 segment earnings included Identified Items of $2,805 million which comprised losses of $2,443 million due to the fair value accounting of commodity derivatives and impairment charges of $361 million mainly in Europe. The full year 2021 Identified Items were a loss of $1,272 million, mainly as a result of the fair value accounting of commodity derivatives.

Adjusted Earnings were $1,745 million in 2022. Adjusted Earnings from Energy Marketing and Trading and Optimisation accounted for 135% of R&ES 2022 Adjusted Earnings, partially offset by Renewable Power Generation, Hydrogen, CCS, NBS and Shell Ventures that accounted for (35)%.

Adjusted EBITDA was $2,459 million and included the impact of underlying operating expenses of $3,583 million, driven by business growth and the early-development stage of some of the portfolios prior to operating status.

Adjusted Earnings were a loss of $243 million in 2021. Adjusted Earnings from Renewable Power Generation, Hydrogen, CCS, NBS, and Shell Ventures accounted for 155% of R&ES 2021 negative Adjusted Earnings. These were partially offset by a positive Adjusted Earnings contribution from Energy Marketing and Trading and Optimisation (55)%.

Earnings 2021-2020

Segment earnings in 2021 were a loss of $1,514 million, compared with a loss of $479 million in 2020. This bigger loss was mainly driven by higher operating expenses, mainly related to provisions for counterparty risk due to the Texas winter storm (around $1,000 million), and lower contributions from trading, marketing and optimisation results for gas and power (around $300 million). This was partly offset by lower tax charges (around $300 million).

Full year 2021 segment earnings included Identified Items of $1,272 million, which comprised losses mainly due to the fair value accounting of commodity derivatives. Full year 2020 Identified Items were a loss of $277 million, reflecting impairment charges of $190 million and the fair value accounting of commodity derivatives of $89 million.