Royal Dutch Shell reported an eye-watering profit loss when it reported that it earned $1.94 billion for 2015. This is a staggering 87 percent decline from the $15 billion profit earned the previous year. The figures had been expected as the company recently tempered earnings expectations, predicting $1.6 billion to $2 billion profit, AFP reported.
The earnings update, which was released Thursday, was posted amid the company's sale of several assets estimated to be worth billions of dollars. It has also slashed at least 10,000 jobs in a bid to cut expenditures.
Shell's sinking profit is mainly attributed to the collapse of oil prices in recent days. The weak oil price has also affected other players in the industry. For instance, ExxonMobil, the world's largest oil company, earlier reported its smallest quarterly profit in a decade, according to Reuters.
The income decline at Shell is also considered an offshoot of its takeover of the BG Group, a smaller rival, Ben van Beurden, Shell's CEO, told ABC News.
In order to address shareholder concerns over the financial performance of the company amidst current oil market condition, van Beurden cited how the organization is undertaking a reduction in costs and capital investments. "We are making substantial changes in the company ... and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices," he said in the ABC News report. "In 2015, we significantly curtailed spending by reducing the number of new investment decisions and designing lower-cost development solutions."
