Shell’s full-year net profit tumbles 23% on lower oil and gas prices

Oil giant Royal Dutch Shell reported a sharp fall in full-year net profit on Thursday, citing challenging macroeconomic conditions and lower oil and gas prices. Net income attributable to shareholders on a current cost of supplies (CCS) basis and excluding identified items, which is used as a proxy for net profit, came in at $16.462 billion for the full-year 2019. That compared with a profit of $21.404 billion for full-year 2018, reflecting a year-on-year drop of 23%.

Analysts had expected full-year 2019 net income attributable to shareholders on a CCS basis, and excluding identified items, to come in at $17.770 billion, according to data from Refinitiv. The Anglo-Dutch energy giant warned last month that it would book additional charges against its income in the fourth quarter.

International benchmark Brent crude traded at $59.20 Thursday morning, down more than 1%, while U.S. West Texas Intermediate (WTI) stood at $52.81, around 0.9% lower. Both crude benchmarks slumped to multi-month lows earlier in the week, as energy market participants try to assess the potential impact of China’s coronavirus on oil demand growth. Chinese health officials confirmed there had been 7,711 cases of the deadly pneumonia-like virus at the end of Wednesday, with 170 deaths. The World Health Organization’s (WHO) Emergency Committee is set to reconvene on Thursday, with officials poised to decide whether the outbreak constitutes a global health emergency.