BG Group reported that revenue and other operating income decreased 21% to $3 993 million.
Article continues below
This is reflecting a significant fall in realised commodity prices in the Upstream segment, partially offset by higher delivered volumes in the LNG Shipping & Marketing segment.
EBITDA decreased 41% to $1 591 million, primarily driven by lower revenues in the Upstream segment, where EBITDA fell 56% to $870 million. LNG Shipping & Marketing EBITDA reduced 3% as higher revenues, primarily resulting from an increase in delivered volumes and weather-related gains in North America, were more than offset by lower margins resulting from a decline in LNG sales prices.
EBIT decreased by $1 025 million to $945 million, reflecting the reduced EBITDA, partly offset by lower DD&A mainly due to changes in the mix of E&P production.
Net finance costs of $44 million included foreign exchange gains of $2 million (2014 net finance costs of $51 million included foreign exchange losses of $13 million).
The tax charge for the quarter reduced to $336 million and reflects the lower profit before tax and a lower effective tax rate (excluding BG Group’s share of joint ventures and associates’ results and tax) of 40.0% compared to 41.3% in 2014. The 2015 full year effective tax rate could be subject to further movements during the remainder of the year.
However, the Group’s current estimate of 40% is at the bottom of the previous guidance range of 40% to 50% as a result of changes to UK tax rates and changes in the expected mix of profits.
Group earnings of $565 million and EPS of 16.6 cents both decreased 51%, with the reduction in EBIT being only partially offset by the reduction in the Group’s effective tax rate.
Net cash flow from operating activities decreased 59% to $958 million, reflecting the lower operating results partiallyoffset by favourable working capital movements.
Capital investment on a cash basis of $1 653 million was entirely in the Upstream segment and consisted of $1 510 million on development and other activities, and $143 million on exploration. The development spend was concentrated primarily on the Group’s key growth projects in Brazil ($695 million) and Australia ($366 million), together with investments in the UK ($109 million), Kazakhstan ($61 million) and Trinidad and Tobago ($54 million).
Free cash flow decreased by $845 million to a $(692) million outflow, primarily reflecting the decrease in net cash flow from operating activities, partly offset by the reduction in capital investment.
Net debt of $12 072 million and gearing of 29.6% were broadly in line with the end of 2014 ($11 998 million and 29.2%, respectively). Return on average capital employed reduced to 7.8% reflecting the lower Business Performance results. ■