Royal Dutch Shell saw its earnings dive to an 11-year low on during the second quarter, missing analysts targets.
The company reported an income attributable to shareholders of $1.17 billion, a 71 percent year-over-year decline.
Current cost of supplies (CCS) earnings attributable to shareholders tumbled 93 percent year-over-year to $239 million in the second quarter.
According to Bloomberg, the earnings decline marks Shell’s lowest earnings in 11 years.
Identified items for the second quarter were negative $806 million compared to negative $399 million in the year ago quarter.
CCS earnings attributable to shareholders excluding identified items fell 72 percent from the prior year quarter to about $1.04 billion.
Analysts had expected the company to post a CCS earnings attributable to shareholders of about $2.16 billion, according to Bloomberg.
Shell said second quarter earnings attributed to shareholders were impacted by low commodity prices, the depreciation step-up resulting from its BG acquisition, weaker refining industry conditions and increased taxation.
Shell said that second quarter earnings “benefited from increased production volumes from BG assets.”
Basic CCS earnings per share fell to $0.03 per share, a 94 percent decline compared to the second quarter of 2015.
Cash flow from operating activities declined 62 percent year-over-year to $2.29 billion, including negative working capital movements of $2.5 billion, Shell said.
Integrated Gas earnings excluding identified items fell 38 percent year-over-year to $868 million in the second quarter.
Integrated Gas cash flow from operating activities climbed 89 percent year-over-year to $2.73 billion.
Upstream earnings excluding identified items sank 183 percent from the prior year quarter to a loss of $1.32 billion.
Upstream cash flow from operating activities fell to a loss of $297 million, a 146 percent year-over-year decline.
Downstream earnings excluding identified items tumbled 39 percent from the prior year quarter to $1.81 billion.
Downstream cash flow from operating activities slid down to $571 million, an 85 percent decline from the second quarter of 2015.
Corporate and non-controlling interest earnings excluding identified items fell to a loss of $314 million compared to a loss of $135 million in the prior year quarter.
The company’s oil and gas production for the second quarter 2016 was 3.508 million barrels of oil equivalent per day (boe/d), an increase of 28 percent compared with the second quarter 2015.
Shell said it expects third quarter Integrated Gas earnings to be “negatively impacted” by a reduction of about 15,000 boe/d associated with the impact of maintenance compared to the third quarter of 2015.
The company expects third quarter Upstream earnings to be “negatively impacted” by a reduction of about 35,000 boe/d associated with “sabotage incidents and repairs in Nigeria.”
Shell added that earnings could be further impacted if security conditions in Nigeria continue to deteriorate.
“Downstream and Integrated Gas businesses contributed strongly to the results, alongside Shell’s self-help programme. However, lower oil prices continue to be a significant challenge across the business, particularly in the Upstream,” Shell CEO Ben van Beurden said on Thursday.