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Shell issues shock profit warning as results plummet Shell issues shock profit warning as results plummet
(about 1 hour later)
Royal Dutch Shell's new boss Ben van Beurden has admitted the oil firm's performance was not what he expected from the group in 2013 as he issued a shock profit warning just two weeks after taking over at the helm.Royal Dutch Shell's new boss Ben van Beurden has admitted the oil firm's performance was not what he expected from the group in 2013 as he issued a shock profit warning just two weeks after taking over at the helm.
Van Beurden – who succeeded Peter Voser as chief executive on 1 January – said the firm's fourth-quarter figures were expected to be "significantly lower than recent levels of profitability".Van Beurden – who succeeded Peter Voser as chief executive on 1 January – 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 $2.9bn (£1.8bn).Its fourth quarter underlying earnings are now expected to almost halve to around $2.9bn (£1.8bn).
This is set to leave full-year results 23% lower at $19.5bn.This is set to leave full-year results 23% lower at $19.5bn.
Van Beurden said: "Our 2013 performance was not what I expect from Shell."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.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 badly hit by a 49% drop in downstream profits as a result of weaker refining conditions caused by industry overcapacity and weak demand.Its recent third-quarter figures were badly hit by a 49% drop in downstream profits as a result of weaker refining conditions caused by industry overcapacity and weak demand.
The group also said on Friday it expects hefty writedowns of $700m for the fourth quarter and $2.7bn for the full year relating to its upstream business. The group also said on Friday that it expected hefty writedowns of $700m for the fourth quarter and $2.7bn for the full year relating to its upstream business.
These are expected to hit results even further, sending fourth quarter earnings 70% lower to around $2.2bn and 2013 earnings 38% down to about $16.8bn.These are expected to hit results even further, sending fourth quarter earnings 70% lower to around $2.2bn and 2013 earnings 38% down to about $16.8bn.
Van Beurden added: "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."Van Beurden added: "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 30 January.The group will report full-year results on 30 January.
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