Oil giant Shell in profits alert
PUBLISHED: 10:58 17 January 2014 | UPDATED: 10:58 17 January 2014
Royal Dutch Shell’s new boss Ben van Beurden today admitted the oil giant’s performance was “not what I expect” from the group in 2013 as he issued a shock profit warning just two weeks after taking over at the helm.
Mr Van Beurden - who succeeded Peter Voser as chief executive on January 1 - said the firm’s fourth quarter figures were expected to be “significantly lower than recent levels of profitability”.
Its fourth quarter underlying earnings are now expected to almost halve to around 2.9 billion US dollars (£1.8 billion).
This is set to leave full year results 23pc lower at 19.5 billion dollars (£11.9 billion).
Mr Van Beurden said: “Our 2013 performance was not what I expect from Shell.”
Shell blamed lower oil and gas prices and “weak industry conditions” in downstream oil, as well as higher exploration expenses and lower upstream volumes.
Its recent third quarter figures were hit badly by a 49pc drop in downstream profits as a result of weaker refining conditions caused by industry overcapacity and weak demand.
The group also said today it expects hefty writedowns of 700 million dollars (£429 million) for the fourth quarter and 2.7 billion dollars (£1.7 billion) for the full year relating to its its upstream business.
These are expected to hit results even further, sending fourth quarter earnings 70pc lower to around 2.2 billion dollars (£1.3 billion) and 2013 earnings 38pc down to about 16.8 billion dollars (£10.3 billion).
Mr Van Beurden said: “Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.”
The group will report full-year results on January 30.