Shell cuts dividend first time in 80 years as Oil collapse
Demand and supply pressure has affected oil industries performance in the wake of coronavirus pandemic.
Due to this oil shock, Royal Dutch Shell has cut its dividend for the first time in 80 years.
Not only that, Shell also suspended the next tranche of its share buyback programme following the collapse in global oil demand.
Shell’s first-quarter net income attributable to shareholders based on a current cost of supplies (CCS) and excluding identified items went down.
Its net income dropped by 46% from a year earlier to US$2.9 billion, above the consensus in an analyst survey provided by the company.
The Oil giant’s Chief Executive, Ben van Beurden, said this in a statement issued on Thursday in London.
“Given the continued deterioration in the macroeconomic outlook and the significant mid and long-term uncertainty, we are taking further prudent steps to bolster our resilience, underpin the strength of our balance sheet and support the long-term value creation of Shell,” Beurden said.
Starting in the first quarter, Shell will reduce its quarterly dividend to 16 cents per share from 47 cents in the previous quarter.
For decades, Shell has taken pride in having never cut its dividend since the Second World War, resisting such a move even during the deep downturns of the 1980s.
Shell’s fourth-quarter net income was also US$2.9 billion.
The company said it cut activity at its refining business by up to 40% in response to the demand shock.
Shell cuts dividend first time in 80 years as Oil collapse
