BG Group has announced a number of revisions to the format and content of the Group's financial disclosures to be incorporated in the Group's results statements with effect from the 1Q15 results, which will be released on 8 May 2015.
The revisions form part of an initiative that commenced last year to enhance, simplify and improve the transparency of the Group's external disclosures. The revisions reflect the promotion of Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and Return on Average Capital Employed (ROACE) as key performance indicators for the Group, consistent with an increased focus on improving return on capital and delivering earnings and cash-flow growth. They also reflect the growing importance of Brazil and Australia on the Group's performance.
A summary of the main revisions is set out below.
EBITDA and ROACE
EBITDA will be given equal prominence to Earnings before Interest and Tax (EBIT) and together they will replace the Group's previous performance indicator: Total Operating Profit. In addition to separately identifying Depreciation, Depletion and Amortisation (DD&A) for the Group's E&P, Liquefaction and LNG businesses, the reporting of E&P and Upstream EBITDA requires the separate disclosure of Sundry depreciation. Sundry depreciation relates to non-field specific investments such as IT and office buildings and was previously reported as part of Other E&P costs.
A new EBITDA margin metric, LNG Shipping & Marketing EBITDA margin per delivered tonne, will be reported within the LNG Shipping and Marketing segment.
ROACE will be calculated on the same basis as reported in the Group's Annual Report and Accounts, representing Business Performance earnings (excluding disposals, re-measurements 2 and impairments), excluding net finance income/costs on net borrowings, as a percentage of average capital employed.
Queensland Curtis LNG
Recognising the growing importance and materiality of the Group's Queennsland Curtis LNG (QCLNG) operations in Australia, the level of disclosure of liquefaction results within the Upstream segment will be increased. Operating costs, JV and Associates' results, EBITDA, DD&A and EBIT will now be separately disclosed. These disclosures will relate primarily to the Group's QCLNG operations, although results from the Group's liquefaction interests in Trinidad and Tobago and Egypt will also be included.
E&P sales volumes
In addition to existing disclosures regarding the Group's E&P production volumes, disclosure of E&P 'sales volumes' by product will be introduced. This will improve transparency of the impact of oil cargoes in transit and oil held in stock on FPSOs in Brazil, as well as fuel gas and other stock adjustments. In addition, the provision of sales volumes will enable users to reconcile the Group's reported Oil, Liquid and Gas price realisations, which are derived from sold rather than produced volumes.
Edited from press release by Callum O'Reilly
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