Dutch Shell confirms 10,000 job cuts and a steep profits fall

Royal Dutch Shell has confirmed it is cutting 10,000 jobs amid its steepest fall in annual profits for 13 years.

It made $1.8bn (£1.23bn) for the fourth quarter of the year, compared with a $4.2bn profit for the same period the year before. 

 

Full-year 2015 earnings, excluding identified items, were $10.7bn, compared with $22.6 billion in 2014.

The oil firm indicated it would report a massive drop in profits two weeks ago.

Royal Dutch Shell profits drop, a week before shareholders vote DEAL

For the fourth quarter it expects profits of $1.6bn to $1.9bn, less than half the $4.2bn it made a year ago.

It expects full year profits of $10.4bn to $10.7bn, below its $10.8bn guidance.

The oil firm has issued the preliminary results to enable investors to have up-to-date information on its performance ahead of the vote on 27 January.

Its shares fell 3.7% in early trading.

But chief executive Ben van Beurden said he was "pleased" with the results.

"The completion of the BG transaction, which we are expecting in a matter of weeks, will mark the start of a new chapter in Shell, to rejuvenate the company, and improve shareholder returns," he added.

Royal Dutch Shell's results are calculated on the basis of replacement cost, which reflects the current cost of supplies and is widely seen as the best measure of an oil firm's underlying performance.

Deal questioned

Standard Life Investor in Royal Dutch Shell says it will Vote against Shell BG tie-up

A key investor in Royal Dutch Shell has said the oil company's proposed takeover of BG Group does not work at current oil prices.

 

David Cumming, head of equities at Standard Life, said oil needed to be over $60 rather than the current $33.

He said the fund manager would oppose the deal when it goes to a shareholder vote later this month.

But Shell has said it remains confident of winning the vote.