Thursday, July 26th, Royal Dutch Shell announced second-quarter net profits dropped 53% to $4.06 billion (3.34 billion euro) due to slack demand and the sliding world oil prices.
Adjusted net profits dropped 13% to $5.72 billion during three months ending June, compared to $6.55 billion in the same period last year. Gas and oil production increased 1.9% to 3.103 million barrels of oil equivalent per day, due to important projects in Qatar and Canada. Analysts predicted a 4.0% increase.
“Our industry continues to see significant energy price volatility as a result of economic and political developments,” chief executive Peter Voser said in a statement. “We are moving forward in volatile times. Our profits have fallen with energy prices.”
Voser added that Shell still plans to invest $32 billion by the end of this year for the expansion of its production portfolio. Shell’s ‘A’ shares dropped 3.09% to 2,119.50 pence on London’s benchmark FTSE 100 index.
“A drop in earnings had been expected, but not to this extent as evidenced by the share price fall,” said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers. “The deterioration in the oil price of late has weakened profitability. At a time when investors are looking towards blue chip reliability, the disappointment contained in the headline figures is palpable.”