Royal Dutch Shell has insisted its $49 billion (£34bn) takeover of BG Group heralds the start of a “new chapter” as it saw annual profits crash by 80 per cent.
The oil giant saw full-year earnings tumble to $3.8bn in 2015, from $19bn the previous year, after it was hammered by the recent collapse in oil prices.
On an underlying basis, full-year earnings fell 53 per cent to $10.7bn.
Shell, which had braced the City for a sharp fall in figures last month, said it had been slashing costs and leading an overhaul to offset the oil price rout, but added it was ready to take further action if needed.
Chief executive Ben van Beurden said: “The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company and improving shareholder returns.”
The group stripped out $4bn of operating costs – about 10 per cent of its total – from the business in 2015 and plans to cut a further $3bn this year.
It has also previously confirmed more than 10,000 jobs will be axed as part of the BG tie-up and it is planning to offload $30bn of assets.
“Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that,” van Beurden said.
The results come less than two weeks before Shell is due to complete its mammoth takeover of BG on 15 February after the deal was given the green light by shareholders last week.
Shell’s figures also follow those of rival BP, which two days ago reported its largest annual loss for at least 20 years and revealed another 3,000 job losses.
The oil sector has been battered by the cost of crude, which slumped below $28 a barrel at one stage last month and has collapsed by more than 70 per cent since a peak of about $115 US dollars a barrel in the summer of 2014.
Shell said it was “making substantial changes in the company” in response to the oil price declines, although the industry is hoping for a rebound later this year.
BP boss Bob Dudley has said he believes oil prices will rise to between $50 and $60 a barrel by the end of the year as production is cut and demand grows from China and the US.
Shell’s full-year profit drop comes after a tough fourth quarter, with earnings down 56 per cent to $1.8bn, or a 44 per cent fall on an underlying basis.
But the group offered some welcome cheer to investors as it confirmed it was set to maintain its dividend payout at 0.47 cents a share in the first quarter of 2016 – unchanged from the level paid out in previous quarters. It said last month dividends would total $1.88 a share for last year and are expected to be at least the same for the year ahead.