Shell, Eni give cool outlook as profits take a tumble

08:36, October 30, 2009      

Email | Print | Subscribe | Comments | Forum 

Oil majors Royal Dutch Shell Plc and Eni warned of a slow recovery, highlighting weak energy demand and operational challenges, as their profits slumped.

Shell, Europe's largest oil company by market value, said it was cutting 5,000 jobs to tackle the tough economic environment.

The results and pessimistic outlook contrast with third- quarter earnings from London-based BP Plc which smashed forecasts by 50 percent, lifting sector shares on hopes the industry would weather the economic slump better than expected.

They also follow renewed fears the global economic recovery may be more protracted that some had thought, a factor which weighed on crude prices yesterday.

"We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain, and we are not expecting a quick recovery," Shell Chief Executive Peter Voser said.

Shell's London-listed A shares traded down 3 percent at 1,853 pence at 0820 GMT, while Eni's shares dropped 3.1 percent to 17.02 euros against a 1 percent drop in the DJ Stoxx European oil and gas sector index

Milan-based Eni predicted European demand for natural gas and fuels would continue to shrink, and said it was cutting its production target for the year.

Shell said third-quarter current cost of supply net income, which strips out unrealised gains or losses related to changes in the value of fuel inventories, fell 73 percent to $2.99 billion.

Excluding one-off and non-cash items the result was $2.62 billion, slightly ahead of an average forecast of $2.55 billion from a Reuters poll of eight analysts.

Eni's third-quarter adjusted net profit, which also strips out inventory gains and non-operating items, fell 60.5 percent to 1.15 billion euros compared with a Thomson Reuters consensus of 1.11 billion.

Source:China Daily
  • Do you have something to say?
Special Coverage
  • 60th anniversary of founding of PRC
Major headlines
Editor's Pick
Most Popular
Hot Forum Dicussion