Shell profits plunge in 2009, axes more jobs

SHELL president and chief executive Peter Voser
announces the 2009 annual results at the Royal Dutch
Shell headquarters in The Hague yesterday. — AFP

LONDON — Energy giant Royal Dutch Shell reported a plunge in annual profits yesterday, blaming a weak global economy and an uncertain outlook as it axed 1,000 jobs and earmarked more assets for disposal. Shell said in a statement that net profit tumbled 52 per cent to $12.52 billion (9 billion euros) last year from $26.28 billion in 2008. "Our fourth quarter 2009 results were impacted by the weak global economy," Royal Dutch Shell Chief Executive Officer Peter Voser said in the statement.

"Oil prices have increased compared to a year ago but gas prices and refining margins have declined sharply because of weaker demand and high industry inventory levels. "We are not assuming that there will be a quick recovery and the outlook for 2010 is uncertain," he said. However, the group bounced back into the black in the three months to December, owing to a major restructuring programme and a modest recovery in crude oil prices.

Fourth quarter net profit stood at $1.96 billion after a heavy loss of $2.81 billion in the same period in 2008 when the global downturn slashed worldwide energy demand. BP said on Tuesday that it also returned to profit in the fourth quarter, with net earnings of $4.30 billion as it ramped up production and slashed costs.

Shell said yesterday that its adjusted net profit, which strips out exceptional items and changes to the value of its oil inventories, slumped 75 per cent to $1.18 billion in the fourth quarter. Production slid two per cent over the period to 3.33 million barrels of oil equivalent per day. "For 2010, we are targeting a further underlying cost reduction of at least $1 billion and a reduction of some 1,000 employees," Shell said. "Much of this will come from downstream and ongoing cost initiatives in the corporate functions." Shell said it axed 5,000 jobs last year as part of a major restructuring which saved more than $2 billion. — AFP