London - Energy giant Royal Dutch Shell said on Thursday its net profits sank 14% last year despite an upbeat final quarter, as the group battled headwinds including volatile oil and gas prices.
Earnings after tax dropped to $26.59bn (€19.62bn) in 2012, compared with $30.92bn in the previous year, the Anglo-Dutch company revealed in its annual results statement.
Net profits though rose 3.0% to $6.7bn in the three months to December, from $6.5bn last time around. Production also grew by 3.0% to 3.41 million barrels of oil equivalent per day in the fourth quarter on an annual basis.
Adjusted net profits, stripping out gains or losses from fluctuations in the value of inventories, jumped 13% to $7.29bn in the fourth quarter, as higher refining margins offset increased costs in exploration and production.
Total revenues meanwhile increased by 2.0% to $118.05bn in the last three months of 2012.
And the group also lifted its fourth-quarter shareholder dividend by 2.4% to 43 cents per share.
"Shell is on track for plans we set out in early 2012, despite headwinds last year," chief executive Peter Voser said in the earnings release.
"Shell is competitive and innovative. We are delivering a strategy that others can't easily repeat, with unique skills in technology and integration and a worldwide set of opportunities for new investment."
The London-listed energy major added that it would make $33bn in net capital investment this year, with new projects lined up for Nigeria, Kazakhstan, Iraq and the Arctic, as part of its ongoing investment plans.
"Shell will continue the strategic drive to grow its upstream businesses, with ongoing selective investment in downstream," it said.
The group also noted that the global energy demand outlook was solid, despite the challenging economic backdrop.
"Although the economic outlook remains uncertain for some of Shell's key markets... the prospects for long-term growth in global energy demand remained unchanged, driven by rising world population and improving standards of living in developing countries," the company said.
Voser added: "Meeting this demand growth with clean and affordable energy is a formidable challenge for our industry and it is a major opportunity for Shell."
In reaction to the mixed results, Shell saw its 'A' share price drop 1.3% to 26.48 pence in late morning deals on London's FTSE 100 index of leading companies, which was 0.42% lower.
"Today's numbers have failed to inspire against the backdrop of a generally lacklustre market," noted Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
Shell's main British rival BP will unveil its annual earnings on Tuesday.