New boss Ben van Beurden admits disappointing year as fourth-quarter results almost halve to $2.9bn with 23% full-year drop

This article is more than 6 years old

This article is more than 6 years old

Royal Dutch Shell's new boss Ben van Beurden has admitted the oil firm's performance was not what he expected from the group in 2013 as he issued a shock profit warning just two weeks after taking over at the helm.

Van Beurden – who succeeded Peter Voser as chief executive on 1 January – said the firm's fourth-quarter figures were expected to be "significantly lower than recent levels of profitability".

Its fourth quarter underlying earnings are now expected to almost halve to around $2.9bn (£1.8bn).

This is set to leave full-year results 23% lower at $19.5bn.

Van Beurden said: "Our 2013 performance was not what I expect from Shell."

Shell blamed lower oil and gas prices and "weak industry conditions" in downstream oil, as well as higher exploration expenses and lower upstream volumes.

Its recent third-quarter figures were badly hit by a 49% drop in downstream profits as a result of weaker refining conditions caused by industry overcapacity and weak demand.

The group also said on Friday that it expected hefty writedowns of $700m for the fourth quarter and $2.7bn for the full year relating to its upstream business.

These are expected to hit results even further, sending fourth quarter earnings 70% lower to around $2.2bn and 2013 earnings 38% down to about $16.8bn.

Van Beurden added: "Our focus will be on improving Shell's financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery."

The group will report full-year results on 30 January.