Royal Dutch Shell has cut its dividend for the first time since World War Two, following the collapse in global oil demand due to the coronavirus pandemic.
The energy giant also suspended the next tranche of its share buyback programme. The move came as it announced a 46% fall in first-quarter net income to $2.9bn (£2.3bn).
Chief executive Ben van Beurden warned of “continued deterioration in the macroeconomic outlook”. He said Shell was taking “further prudent steps to bolster our resilience” and “underpin the strength of our balance sheet”.
Global demand for oil has all but dried up as lockdowns across the world have kept people inside. As a result, oil firms have resorted to renting tankers to store the surplus supply
Earlier this month, a technicality of the global oil market temporarily pushed prices into negative territory.
Shell is cutting its quarterly dividend by two-thirds, from 47 cents to 16 cents, starting in the first quarter of this year. The company said it had also cut activity at its refining business by up to 40% in response to the sharp fall in demand for oil.
Earlier this week, rival oil giant BP said its first quarter profit had dived by two thirds and warned it was facing an “exceptional level of uncertainty”, but it maintained its dividend.
Source: bbc.com
