POST Online Media Lite Edition



 

BG Group Q4 revenue decreased 2%, LNG delivered volumes up 110%

Staff writer |
BG Group plc fourth quarter revenue and other operating income decreased 2% to $4,300 million.

Article continues below






This reflects the significant fall in realised sales prices impacting both the Upstream and LNG Shipping & Marketing segments, offset by higher volumes in both segments and the start-up of liquefaction operations at Queensland Curtis LNG (QCLNG).

E&P production volumes were up 20% with LNG delivered volumes up 110%. EBITDA decreased 22% to $1,426 million. In the Upstream segment, EBITDA fell 12% to $1 072 million primarily reflecting the lower revenues partly offset by the increased contribution from liquefaction following the start-up of QCLNG operations.

In the LNG Shipping & Marketing segment, EBITDA fell 51% to $272 million as margins reduced primarily as a consequence of lower sales prices. The increased contribution from the Other activities segment eflects a reduction in the number of LNG cargoes in transit at the end of the fourth quarter.

EBIT decreased by $692 million to $473 million, reflecting the lower EBITDA and higher DD&A charges primarily as a result of increased E&P production and the start-up of QCLNG.

Net finance costs of $106 million included foreign exchange losses of $27 million (2014 net finance costs of $8 million included realised foreign exchange hedge losses of $13 million and other foreign exchange gains of $46 million).

Excluding the impact of foreign exchange, net finance costs increased by $38 million to $79 million, reflecting the reduction in the amount of interest on borrowings that can be capitalised against assets under construction following the start-up of QCLNG.

The group’s taxation for the quarter (excluding BG group’s share of joint venture and associates’ results and tax) was a credit of $56 million. This reflects the lower profit before tax, combined with the impact of a reduction in the group’s full year effective tax rate recognised in the quarter.

group earnings of $423 million and EPS of 12.4 cents both decreased 54%, with the reduction in EBIT and higher net finance costs only partially offset by the reduction in taxation.

Net cash flow from operating activities decreased by $101 million to $1 575 million as a result of lower Business Performance EBITDA and lower working capital inflows, partly offset by lower tax payments.

Capital investment on a cash basis was 28% lower at $1 732 million and was almost entirely in the Upstream segment ($1 722 million), where it comprised $1 594 million on development and other activities, and $128 million on exploration. The development spend was concentrated primarily in Brazil ($705 million) and Australia ($597 million).

Free cash flow improved by $597 million to a $348 million outflow, reflecting the reduction in capital investment, partly offset by the decrease in net cash flow from operating activities.

Full year

Revenue and other operating income decreased 16% to $16 419 million, reflecting the significant fall in realised sales prices impacting both the Upstream and LNG Shipping & Marketing segments.

The impact of lower prices was partly offset by higher volumes in both segments, the start-up of liquefaction operations at QCLNG and weather-related gains in North America in the LNG Shipping & Marketing segment. E&P production volumes were up 16% and LNG delivered volumes were up 63%.

EBITDA decreased 39% to $5 633 million. In the Upstream segment, EBITDA fell 35% to $4 167 million primarily reflecting the lower revenues, partly offset by the increased liquefaction contribution from QCLNG.

In the LNG Shipping & Marketing segment, EBITDA fell 46% to $1 456 million as margins reduced through a combination of lower sales prices and a greater proportion of relatively lower margin spot cargoes.

EBIT decreased by $3 948 million to $2 429 million, reflecting the reduction in EBITDA combined with increased DD&A charges, which resulted from higher E&P production volumes and the start-up of QCLNG.

Net finance costs of $260 million included foreign exchange gains of $nil (2014 net finance costs of $109 million included realised foreign exchange hedge gains of $28 million and other foreign exchange gains of $21 million).

Excluding the impact of foreign exchange, net finance costs increased by $102 million to $260 million, reflecting the reduction in the amount of interest on borrowings that can be capitalised against assets under construction following the start-up of QCLNG.

The tax charge for the full year reduced to $472 million and reflects the lower profit before tax and the reduction in the group’s full year effective tax rate (excluding BG group’s share of joint ventures and associates’ results and tax) to 24.0% (2014 36.9%), and includes the impact of further changes in the group’s mix of profits and revisions to certain tax positions.

group earnings of $1 697 million and EPS of 49.7 cents both decreased 58%, with the reduction in EBIT and higher net finance costs only partially offset by the reduction in the group’s tax charge.

Net cash flow from operating activities deteriorated by $3 096 million to $4 303 million as a result of lower Business Performance EBITDA and lower working capital inflows, partially offset by lower tax payments.

Capital investment on a cash basis was 32% lower at $6 387 million and was almost entirely in the Upstream segment ($6 377 million), consisting of $5 779 million on development and other activities, and $598 million on exploration.

The development spend was concentrated primarily in Brazil ($2 656 million) and Australia ($1 585 million).


What to read next

Intel Q2 GAAP revenue $13.5 billion
Hub Group Q1 reported income of $12 million
Intel Q3 revenue $15.8 billion