Press "Enter" to skip to content

Royal Shell Cuts Dividend First Time After WWII

Royal Dutch Shell cut its dividend for the first time since World War Two Thursday as the energy firm retrenched in the face of an unprecedented drop in oil demand due to the coronavirus pandemic.

Royal Shell Cuts Dividend First Time After WWII

Shell also suspended the subsequent tranche of its share buyback program and said it was reducing oil and gas production by nearly a quarter after its net revenue virtually halved in the first three months of 2020.

Shell’s stocks in London had dropped 7%, sharply underperforming rival BP, which was down 2.2%.

For years, Shell has taken pride in having never canceled its dividend since the Forties, resisting such a transfer even during the deep downturns within the oil market of the Eighties.

Some investors, however, had called on main oil firms to break a business taboo and consider chopping dividends, rather than taking on more debt to maintain payouts.

He stated the cut in Shell’s payout was a long-term “reset” of the corporate’s dividend policy.

Shell stated it would scale down its quarterly dividend by two-thirds to 16 cents per share from the 47 cents it paid each quarter in 2019. If maintained for 2020 as a whole, Shell would save about $10 billion.

Shell is the first of the five so-referred to as Oil Majors to cut its dividend due to the fallout from the coronavirus crisis. BP and Exxon Mobil have mentioned they’ll maintain their Q1 dividends, whereas Total and Chevron have yet to report first-quarter outcomes.

Comments are closed.