Royal Dutch Shell revealed a massive drop in its second quarter earnings attributing it to weaker refining margins, lower oil prices and depreciation charges related to its $47bn takeover of BG Group.
In an update on Thursday (28 July), the oil giant said earnings attributable to shareholders fell by 71% on an annualised basis to $1.18bn (£896m) from $3.99bn in the second quarter of last year, while income, excluding exceptional items, deemed a better industry gauge, dropped 72% to $1.05bn from $3.76bn.
However, the company maintained its dividend at $0.47. Earnings per share fell by a massive 94% to $0.03 from $0.53.
Shell said that operating expenses excluding identified items decreased by $900m compared to the second quarter of last year, before increasing by $1bn "due to the consolidation of BG".
Chief executive Ben van Beurden said: "Lower oil prices continue to be a significant challenge across the business, particularly in the upstream. We are managing the company through the down-cycle by reducing costs, by delivering on lower and more predictable investment levels, executing our asset sales plans and starting up profitable new projects.
"At the same time, integration of Shell and BG is making strong progress, and our operating performance continues to further improve. We are making significant and lasting changes to Shell's working practices and cost structure. Shell is firmly on track to deliver a $40 billion underlying operating cost run rate at the end of 2016."