Arab Today, arab today energy giant shell issues shock profits warning
Last Updated : GMT 14:40:32
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Blaming exploration costs, pressures across industry

Energy giant Shell issues shock profits warning

Arab Today, arab today

Arab Today, arab today Energy giant Shell issues shock profits warning

Royal Dutch Shell warned its profits were expected to lower
London - Arab Today

Royal Dutch Shell warned its profits were expected to lower Shell issued a severe profits warning on Friday blaming exploration costs, pressures across the oil industry and disruption to Nigerian output, while its shares fell sharply. The energy group said that fourth-quarter profits were set to be "significantly lower than recent levels".
Profit on a current cost of supplies (CCS) basis or current-cost accounting -- which strips out changes to the value of oil and gas inventories -- was set to plunge 70 percent to about $2.2 billion (1.6 billion euros) in the three months to December, from $7.3 billion a year earlier.
Over the course of 2013, CCS profit was expected to dive by 38 percent to about $16.8 billion.
The grim figures caused Shell's share price to fall heavily in early morning deals on the London stock market.
"Shell's fourth quarter 2013 earnings ... were impacted by weak industry conditions in downstream oil products, higher exploration expenses and lower upstream volumes," the London-listed company said.
Excluding one-off items, CCS profit sank to $2.9 billion in the fourth quarter, down from $5.6 billion in the same part of 2012.
"Our 2013 performance was not what I expect from Shell," said chief executive Ben van Beurden in the gloomy update, published just two weeks after he took the helm at the Anglo-Dutch energy major.
"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."
Net profit was set to plunge by 73 percent to $1.8 billion in the fourth quarter of 2013, compared with the outcome a year earlier, Shell added.
Annual net profit was expected to fall by 38.5 percent to $16.4 billion in 2013, from $26.7 billion in 2012.
Friday's earnings update was published ahead of Shell's official annual results statement, which is scheduled for publication on January 30.
In reaction to the profits warning, Shell's 'A' share price slid 3.30 percent to 2,122.5 pence on London's FTSE 100 index of top companies shares, which was showing a slight gain of 0.09 percent to 6,821.40 points.
"Management is now under pressure to improve group finances with a strategy update in the spring of this year," said ETX Capital trader Ishaq Siddiqi.
"If strategy is compelling enough, traders are likely to pile back into Shell to take advantage of the low share price."
Friday's warning marks a downbeat start to Van Beurden's tenure as chief executive.
The Dutch national took over from Peter Voser on January 1.
Shell had revealed in May that Voser would retire in 2014 to spend more time with his family. He had been chief executive since July 2009 and spent a total of 29 years at the company.
Source: AFP

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Arab Today, arab today energy giant shell issues shock profits warning Arab Today, arab today energy giant shell issues shock profits warning

 



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