Shell slashes dividend for the first time since World War Two

Share On Facebook
share on Linkedin

Royal Dutch Shell has cut its dividend for the first time since World War Two, following a coronavirus pandemic-engendered halving of quarterly earnings.

Net income adjusted for cost of supply dropped to $2.9bn (£2.3bn, €2.7bn) in the three months to March 31 compared with $5.3bn in the same period the previous year. Analysts had estimated $2.3bn.

Oil companies are experiencing a crisis as lower energy prices and a collapse in demand for fuels and chemicals puts pressure on their finances, with severe lockdowns and travel bans in place across the world.

The Anglo-Dutch company said it will reduce its quarterly payout by two thirds to 16 cents per share, from 47 cents per share. The company was the biggest dividend payer on the FTSE 100 in 2019.

Shares in Shell opened 6 per cent lower after the news.

Shell was under pressure before the coronavirus outbreak with weaker refining and chemical margins and challenging economic conditions forcing the company to slow shareholder distributions. It also announced at the start of the year that it would be likely to miss its debt reduction targets.

Since then, Shell has said it will suspend its share buyback programme altogether and announced that capital expenditure would fall to $20bn or less this year, from $25bn. It also said that its operating costs would tumble by $3bn from $7bn to $4bn.

Earlier this week, BP said it would maintain its dividend, despite a 66 per cent drop in first-quarter profits, but added that it would review the shareholder distributions in the second quarter.

Shell’s upstream earnings from oil exploration and production plunged 82 per cent in the quarter. Its gas earnings took a 17 per cent hit, while oil products and chemicals also reported falls in profits.

 

Royal Dutch Shell PLC Class B

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20200919 07:07:38