The oil company said earnings will be between $1.6 – $1.9bn when it reports confirmed figures next month, significantly below the $4.2bn recorded in the fourth quarter of 2014.
The news added to the downward pressure on the FTSE 100 which is suffering today due to a combination of worries about global growth, led by concern over China’s economic prospects. The index was down 2.9% to 5705 by late morning.
The update from Shell comes a week ahead of a general meeting set to determine the outcome of its attempt to aquire BG Group.
Major investors including Standard Life Investments have already expressed serious concerns over the deal in light of the current market conditions.
Shell chief executive Ben van Beurden put a positive spin on the situation though and pointed to the potential benefits of the BG deal.
“I’m pleased with Shell’s operating performance in 2015, and the momentum in the company to reduce costs and to improve competitiveness,” he said. “Bold, strategic moves shape our industry. The completion of the BG transaction, which we are expecting in a matter of weeks, will mark the start of a new chapter in Shell, to rejuvenate the company, and improve shareholder returns.”
“Shell’s drive to improve competitive performance is delivering at the bottom line. Operating costs have reduced by $4 billion, or around 10% in 2015, and the company expects Shell’s costs to fall again in 2016, by a further $3 billion. Synergies from the BG combination will be in addition to that,” he added.
