Shell Q4 slumps on weaker oil, gas prices

Royal Dutch Shell reported a sharp fall in fourth quarter profit on the back of weaker oil and gas prices.

Net income attributable to shareholders on a current cost of supplies (CCS) basis excluding identified items, came in at $2.9bn compared with a profit of $5.68bn a year earlier and $4.76bn in the third quarter. Full year profit fell 23% to $16.5bn.

The Anglo-Dutch company warned last month that it would book additional charges against its income in the fourth quarter.

Fourth quarter CCS earnings attributable to shareholders came in at $871m compared with $7.3bn a year earlier and $6bn in the third quarter. There was no rise in the dividend, which was held at 47 cents a share.

The company cited lower realised oil, gas and LNG prices, weaker realised refining and chemicals margins as well as negative movements in deferred tax positions for the fall.

Brent crude averaged $64.36 a barrel in 2019, down from an average of just over $71 a barrel in 2018. The average price of gas fell to $2.59 per million british thermal units (mmbtu) last year from $3.13/mmbtu.

CEO Ben van Beurden said the company's plan to complete its $25bn share buyback programme in 2020 remained "unchanged, but the pace remains subject to macro conditions and further debt reduction".

Cashflow from operating activities in the fourth quarter came to $12.3bn reflecting lower inflows from commodity derivatives and lower cash earnings. Cashflow for the year fell to $42.17bn from 53.08bn.