4th February 2016
Royal Dutch Shell has reported a steep fall in earnings and that it is to axe a substantial 10,000 jobs as falling oil prices continue to bite.
On Thursday, the oil major confirmed in its results that over the fourth quarter, earnings on a current cost of supplies basis, were $1.8bn compared with $4.2bn for the same period a year ago, marking a steep 57% drop.
Worse still, full year 2015 earnings dropped 80% to $3.8bn compared with $19bn in 2014, in the wake of falling oil prices, which have plummeted from circa $100 a barrel some 18 months ago to around $30 today.
Investors had however been forewarned that profits would suffer on the back of the firm’s BG takeover.
Ben Van Beurden, chief executive officer of Royal Dutch Shell said: “The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company, and improving shareholder returns.
“We are making substantial changes in the company, reorganising our Upstream, and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices.
“As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies.”
Despite the marked fall in earnings, traders were relaxed about the news and by 9.59am, shares in the group had moved nearly 6%, or 80p higher, to 1,518p.