Royal Dutch Shell reports Q4 net profit of $1.96 billion, will cut 1,000 more jobs

Shell makes Q4 profit of $1.96B, to cut more jobs

AMSTERDAM — Royal Dutch Shell PLC on Thursday reported a fourth quarter net profit of $1.96 billion, due to higher oil prices, but said refining margins were poor and announced plans for 1,000 new job cuts.

The profit compares with a loss of $2.81 billion in the same period a year ago, when the company had to write down the value of its inventory after a sharp fall in the price of oil.

However, stripping out the cost of inventories, profit was $1.18 billion, down 75 percent from $4.79 billion.

“Oil prices have increased compared to a year ago, but gas prices and refining margins have declined sharply,” said Chief Executive Peter Voser in a statement, blaming weak demand and high inventory levels.

“We are not assuming there will be a quick recovery and the outlook for 2010 is uncertain.”

Shares fell 1.7 percent to €20.04 in early trading in Amsterdam.

He said moves in October 2009 to cut costs, including shedding 5,000 jobs, or 5 percent of the company’s work force, have led to $2 billion in savings on operating costs. He said the company plans to cut an additional 1,000 jobs in 2010, mostly at its refining operations, and to save another $1 billion in costs.

The company’s production arm saw profits fall 46 percent in the fourth quarter to $2.54 billion, due only partly to a one-time gain of $1.4 billion in the same period a year earlier.

Although oil prices rose, Shell produces about as much gas as oil, and a sharp decline in natural gas prices meant that Shell’s selling prices actually fell.

Also, combined production of oil and gas fell by 2 percent to 3.33 million barrels per day.

At Shell’s refining division, the loss narrowed to $952 million, as intake fell and margins remained negative — but Shell was spared the massive writedown on inventory it took in the fourth quarter of 2008.

The company said Thursday it expected to pay a dividend of $0.42 per share in the first quarter.