BG Group profits, turnover drops as oil price tumbles

 
Catherine Neilan
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Helge Lund: Company is on track with making savings (Source: Getty)

BG Group has issued a set of results worthy of Halloween, with EBITDA slumping 37 per cent in the third quarter as the continued oil price falls and currency woes take their toll.

The figures

Revenue and other operating income fell nine per cent to $4.15bn (£2.7bn) for the three months, which BG Group put down to "a significant fall in realised sales prices". EBITDA fell 37 per cent to $1.24bn, with upstream earnings dropping 22 per cent to $1.09bn and earnings in shipping and marketing plummeting 65 per cent to $213.

Earnings per share fell 63 per cent to 8.2 cents.

Over the nine month period, revenue and income were down 20 per cent, EBITDA down 43 per cent and earnings per share down 59 per cent.

Why it's interesting

This is just the latest in a line of businesses showing their vulnerability to the falling oil price.

BG Group follows hot on the heels of its merger mate Royal Dutch Shell, which yesterday revealed its own dramatic losses. The Anglo-Dutch giant is taking BG over for a cool £47bn, and the deal is expected to conclude early next year.

It could also mean chief executive Helge Lund comes under greater scrutiny over his pay packet this year. Although it was reduced last year, it is still among one of the highest in the FTSE 100.

What they said

Lund praised the business for managing the challenging environment well.

He said: "Our teams delivered another strong operational performance in the third quarter... We are on track to deliver our promised operating and capital cost savings for 2015 and are adding new low cash cost volumes through Australia and Brazil. These actions will help mitigate the impact of lower commodity prices on our financial results.

"We continue to work with Shell on integration planning and to secure the necessary regulatory approvals ahead of the shareholder vote. The transaction remains on track to complete in early 2016."

In short

The company is doing what it can to mitigate the effects of the oil price slump.

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