Shell to Significantly Reduce Costs to Ensure Capital Position Amid Coronavirus
March 23 2020 - 3:53AM
Dow Jones News
By Sabela Ojea
Royal Dutch Shell PLC said Monday that it is taking measures
with the aim of reinforcing its financial position due to the side
effects of the coronavirus, which it said will contribute to a
large amount of free cash flow on a pretax basis.
The oil giant said that these actions are focused on reducing
its expenses, including a $3 billion-$4 billion cut in underlying
operating costs per year over the next 12 months, and reducing its
cash capital expenditure to $20 billion or below for 2020 from a
planned level of $25 billion.
The company should therefore generate between $8 billion and $9
billion of cash before tax, it said.
"In the current environment, Shell's financial resilience is
fundamental to continued investment in our strategic priorities,"
Royal Dutch Shell said.
Regarding its divestment program of more than $1 billion in
2019-20, the company said that it is still committed to it but that
the timing will depend on market conditions.
It also said that the board has decided to not go ahead with the
next tranche of its share-buyback program following the completion
of the current tranche.
"We will continue to review the dynamically evolving business
environment and are prepared to take further strategic decisions
and consider changes to the overall financial framework as
necessary," the company said.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
March 23, 2020 03:38 ET (07:38 GMT)
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