Oil: Shell expects earnings to halve as prices collapse
The group, which is weeks away from completing a £38bn deal to buy BG Group, said it expects full-year underlying earnings to tumble to between £7.3bn and £7.6bn.
This is slightly below expectations in the City and marks a sharp fall on the £15.9bn reported for 2014.
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Hide AdBen van Beurden, chief executive of Royal Dutch Shell, said the deal with BG Group will mark the start of a “new chapter in Shell, to rejuvenate the company”.
Shell’s shares dropped 4 per cent after the update amid wider falls on the London market as the oil price slump continues to hit stocks.
The slump in 2015 earnings comes after Shell said fourth quarter earnings are expected to nearly halve to between £1.1bn and £1.3bn.
This is down from £2.3bn a year earlier and slightly below analyst expectations.
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Hide AdDespite the hit to earnings last year, Mr van Beurden said he was “pleased with Shell’s operating performance in 2015, and the momentum in the company to reduce costs and to improve competitiveness”.
The oil price rout has had a dramatic effect on Shell, with every 10 US dollar change in the price of crude having an impact of around £2.1bn in earnings.
Shell will report full-year results on February 4.