Shell results fall short
THE HAGUE, July 28, 2016 – Shell’s quarterly results released on Thursday fell short of analysts’ expectations, as the company reported a sharp drop in adjusted earnings.
Profit over the second quarter of 2016 fell to USD 1.05 billion, down from USD 3.76 billion over the same period last year, a drop of 71%. The market had been expecting earnings in the range of USD 2.2 billion. On the current cost-of-supplies basis, profits were down 93% to USD 239 million, compared with USD 3.36 billion last year.
While the acquisition of BG Group resulted in a 28% increase in production – around 3.5 million boepd – lower oil and gas prices cut second quarter revenue by USD 13.7 billion to close to USD 60.3 billion. Average oil prices were USD 39.59 per barrel in the past quarter, compared with USD 55.84 per barrel over the second quarter of 2015. Gas was down to USD 113 per million cubic metres (USD 3.21 per million cubic feet), a drop of USD 43.50 per million cubic metres (USD 1.23 per million cubic feet) from last year.
Commenting on the results, chief executive Ben van Beurden said, “Lower oil prices continue to be a significant challenge across the business, particularly in the upstream.” Shell’s upstream business recorded almost USD 2 billion in losses.
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