Shell to post up to $2 billion in impairments in Q2 results

SINGAPORE (ICIS)–Energy major Shell on Friday said that it expects to book $2 billion in post-tax impairments following the sale of its Singapore assets and the suspension of construction at its biofuels plant in the Netherlands.

The sale of the company’s Singapore Energy and Chemicals Park announced in May will result in a non-cash, post-tax impairment of $600 million to $800 million when it publishes its second-quarter results on 1 August, the company said in a statement.

Shell reached an agreement to sell the assets on Singapore’s Pulau Bukom and Jurong Island to CAPGC, a joint venture between Indonesia’s Chandra Asri Capital and global commodities trader Glencore.

The sale is expected to be finalized by the end of 2024.

Meanwhile, the temporarily paused on-site construction work at its 820,000 tonne/year biofuels facility at the Shell Energy and Chemicals Park Rotterdam will result in an impairment of between $600 million and $1 billion.

The facility is designed to produce sustainable aviation fuel (SAF) and renewable diesel made from waste.

Separately, the company said that it expects adjusted earnings at its chemicals unit “to be close to break-even” in the second quarter after posting negative adjusted earnings of $113 million in the first quarter.

The company expects an indicative chemicals margin of $155/tonne for the second quarter, up from $150/tonne in the first quarter and $153/tonne in the same period of last year.

Chemicals utilization for the second quarter is expected to be at 78% to 82%, up from 73% in the first three months of 2024.

Thumbnail photo source: Shell