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UK Sparks: Shell Profits Fall 36%

Edison

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Oil major Royal Dutch Shell has announced a 36% fall in full-year earnings to $15.3bn on its preferred current cost of supplies basis. The group says its performance in the fourth quarter of the year reflected lower realised oil and gas prices, weaker refining and chemicals margins and negative movements in deferred tax positions. Chief executive Ben van Beurden says the company remains committed to its $25bn share buyback programme but the pace remains “subject to macro conditions and further debt reduction”.

Spirits group Diageo has warned that full-year organic net sales growth will be towards the lower end of its 4%-6% guidance range. The company blames the performance on a strong pound and increased levels of volatility in India, Latin America, the Caribbean and in its travel retail business. Interim pre-tax profits fell from £2.63bn to £2.46bn on sales up from £10.4bn to £10.8bn. Reported net sales rose by 4.2% to £7.2bn. Operating profits increased from £2.45bn to £2.5bn but there was an impairment charge of £59m relating to the company’s Old Tavern whisky brand in India.

Unilever has announced a 33% fall in full-year pre-tax profits to €8.29bn after missing its 3%-5% multi-year target range for underlying sales growth. The group also expects to drop below the target in the first half of 2020 but says it should be within the lower half of the range over the full year. In 2019, Unilever achieved underlying sales growth of 2.9%, with total turnover up 2% to €52bn. The group has also announced a strategic review of its global tea business, which includes PG Tips, Brooke Bond and Lipton and generates annual turnover of €3bn.

BT Group suffered a 4% fall in core earnings to £1.98bn on revenues 3% lower at £5.78bn in the third quarter of its financial year.  Chief executive Philip Jansen says the results were “slightly below” the company’s expectations but it remains on track to meet its outlook for the full year.

Finally, life insurance group Prudential has recruited the former UK Government minister Shriti Vadera, as its next chair. She will join the board as a non-executive director in May and succeed Paul Manduca as chair next January, stepping down as chair of Santander UK Group Holdings and senior independent director of miner BHP Group.

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