Shell share price opens lower as oil price drop bites into Q4 earnings

on Jan 29, 2015
Updated: Oct 21, 2019
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Shares in Royal Dutch Shell Plc (LON:RDSA) have lost more than three percent at the opening bell in London this morning, with the company reporting a quarterly drop in earnings and unveiling plans to slash capital spending to counter the continued oil price weakness. As of 08:04 GMT, Shell’s share price had lost 3.13 percent to 2,086.00p.

The European energy giant released its fourth-quarter statement, reporting that its earnings on a current cost of supply (CCS) basis had jumped to $4.2 billion (£2.7 billion), up from $2.2 billion (£1.5 billion) a year ago when the group’s performance was plagued by escalating costs and faltering production from wells. Shell’s Q4 earnings, however, were lower than the $5.3 billion (£3.5 billion) posted in the quarter ended September 30, 2014, reflecting the ongoing oil price rout.

The Anglo-Dutch energy giant also issued a strategy update, noting that its investment levels had come “under severe pressure” in the near term and that it intended to cut back capital spending by over $15 billion for the 2015-17 period.
Shell’s chief executive Ben van Beurden who took the helm at the company about a year ago warned that lower oil prices and the impact of the group’s divestments last year “will likely reduce this year’s cash flow”. He, however, added that the company had to “be careful not to overreact” to the oil price rout.
“Shell is taking structured decisions to balance growth and returns,” van Beurden added.
The FTSE 100 company today announced a fourth-quarter dividend per share of $0.47, marking an increase of $0.02 from the prior-year quarter. The company expects to pay the same amount for the first three months of 2015, in line with the same quarter in the previous year.
As of 08:32 GMT, Thursday, 29 January, Royal Dutch Shell Plc ‘A’ share price is 2,062.00p.

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