LONDON -- Two weeks after shocking the market with a profit warning, Shell (IW 1000/1) on Thursday posted a 39% slump in annual net profits.
Earnings before taxation dived to $16.371 billion last year, compared with $26.712 billion in 2012, the London-listed company confirmed.
The company outlined plans to sell off $15 billion of assets over the next two years and slash capital expenditure.
Shell shocked investors earlier this month with its first profit warning in a decade, blaming high exploration costs, pressures across the oil industry and disruption to Nigerian output.
The group confirmed Thursday that profit on a current cost of supplies (CCS) basis or current-cost accounting -- which strips out changes to the value of oil and gas inventories -- sank to $16.7 billion from $27.2 billion.
CCS profit plunged 70% to $2.2 billion in the fourth quarter, or three months to December, compared with $7.4 billion in the same part of 2012.
"Our momentum slowed in 2013. We must improve our financial results, achieve better capital efficiency and continue to strengthen our operational performance and project delivery," said chief executive Ben van Beurden in the earnings release.
He added: "Our overall strategy remains robust, but 2014 will be a year where we are changing emphasis, to improve our returns and cash flow performance."
Van Beurden revealed that the group would increase the pace of asset sales to $15 billion in 2014-2015.
Capital spending will also be reduced to $37 billion in 2014, from $46 billion in 2013.
The group also confirmed that CCS profit excluding one-off items sank to $2.9 billion in the fourth quarter, down from $5.6 billion.
Shell's 2013 performance was also hit by higher depreciation, lower upstream volumes and weak industry conditions in downstream oil products.
This month's surprise profits warning and dire results mark a disappointing start to van Beurden's tenure as chief executive. The Dutch national took over from Peter Voser on January 1.
Copyright Agence France-Presse, 2014
