Royal Dutch Shell RDSa cuts its dividend for the first time in 80 years and suspended the next tranche of its share buyback program following the collapse in global oil demand due to the coronavirus pandemic.
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 first-quarter net income attributable to shareholders based on a current cost of supplies (CCS) and excluding identified items, fell 46 per cent from a year earlier to 2.9 billion dollars, above the consensus in an analyst survey provided by the company. Shell’s fourth-quarter net income was also 2.9 billion dollars.
The company said it cut activity at its refining business by up to 40 per cent in response to the demand shock.