Economic downturn takes toll on Dutch giants
Shell and Heijmans are some of the Dutch companies to announce plummeting profits in the first quarter of this year.THE NETHERLANDS – Royal Dutch Shell said Wednesday that first-quarter net profit plunged 62 percent to EUR 2.645 billion as oil prices slumped in an economic downturn.
Shell, ranked by Forbes as the Netherlands most profitable company, has been suffering from the effects of the worldwide economic crisis as well as plummeting oil prices. Production remained at around the same level as last year.
"First quarter 2009 performance was affected by the weaker global economy, with a challenging upstream and downstream business environment," Chief Executive Jeroen van der Veer said in a results statement.
Van der Veer added the company would continue investing in new oilfields but keep a tight rein on its spending. Shell's falling profits mirror a 62 percent slide announced on Tuesday by rival oil group BP.
Other first quarter figures released Wednesday also illustrate how the economic downturn is taking its toll.
In line with its expectations, the trade association Transport and Logistics Netherlands announced that activities in the Dutch transport sector are at their lowest ebb since figures were first recorded in 1995.
More than 70 percent of companies saw their turnover fall compared to the first three months of 2008, with an average drop of 15 percent. In the last quarter of 2008, 46 percent of transport companies reported a drop in turnover, and almost half say they are now overstaffed.
In the building sector, the Netherlands' third largest construction firm Heijmans also announced a EUR 34 million loss. Due to its disappointing performance the company is calling a halt to its activities in Germany and the United Kingdom to concentrate on its home base.
Heijmans has already announced 650 redundancies, and does not discount further reorganisation. It blames its troubles on poorly-performing projects and soaring debt, not the economic downturn.
The coming years may look bleak for the construction sector as demand dries up, according to predictions by the Economic Institute for the Building Industry, but as a whole in 2008 the industry booked record profits.
Radio Netherlands / Expatica