BG Group reported that revenue and other operating income decreased 28% to $3 979 million, reflecting a significant fall in realised sales prices impacting both the Upstream and LNG Shipping & Marketing segments.
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The impact of lower prices was partly offset by higher volumes in both segments, with E&P production volumes up 19% and LNG delivered volumes up 17%.
EBITDA decreased 48% to $1 372 million. In the Upstream segment, EBITDA fell 39% to $1 138 million reflecting the lower revenues. In the LNG Shipping & Marketing segment, EBITDA fell 66% to $263 million, driven by lower revenues and a higher proportion of relatively higher cost supply from spot cargoes.
EBIT decreased by $1 332 million to $627 million, reflecting the reduced EBITDA and higher DD&A charges primarily as a result of increased E&P production and the start-up of QCLNG Train 1 in December 2014.
Net finance costs of $55 million included foreign exchange losses of $23 million (2014 net finance costs of $7 million included realised foreign exchange hedge gains of $29 million and other foreign exchange gains of $5 million).
The tax charge for the quarter reduced to $143 million and reflects the lower profit before tax and a reduction in the Group’s expected 2015 full year effective tax rate (excluding BG Group’s share of joint ventures and associates’ results and tax) to 35%. This is lower than the previous guidance of 40.0% primarily as a result of changes in the expected mix of profits.
Group earnings of $429 million and EPS of 12.6 cents both decreased 65%, 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 56% to $926 million, reflecting the lower operating results. Capital investment on a cash basis was 41% lower at $1 470 million and was entirely in the Upstream segment, consisting of $1 317 million on development and other activities, and $153 million on exploration. The development spend was concentrated primarily in Brazil ($569 million) and Australia ($330 million).
Free cash flow decreased by $156 million to a $663 million outflow, primarily reflecting the decrease in net cash flow from operating activities, largely offset by the reduction in capital investment. The total cash inflow for the quarter was $2 385 million, including $4 597 million gross proceeds from the disposal of the QCLNG pipeline. ■