THUR, APRIL 30 2020-theG&BJournal- Chair of the Board of Royal Dutch Shell Chad Holliday and CEO Ben van Beurden both drove home the reality of the coronavirus pandemic on Shell’s business in their statement to shareholders.
‘’The Board believes that maintaining the current level of shareholder distributions is not prudent,..the Board has also decided to reduce the first quarter 2020 dividend and reset to 16 US cents per share,’’ Holliday said in his statement which was re-echoed by the CEO.
The company declared dividend $0.16 dividend per share, down from $0.47 in Q1 2019. Total dividends distributed in the quarter amounted to $3.5 billion.
The surprise statement is the latest illustration of how the deadly coronavius is upsetting businesses global, particularly the energy industry. The dividend cut is also the biggest in the company’s history since the Second World War.
Shell’s adjusted net income plunged 46% in the first quarter of 2020 to $2.86billion down from $5.301 billion in Q1 2019, ‘’reflecting lower realised oil, gas and LNG prices, weaker realised refining and chemicals margins as well as lower sales volumes, compared with the first quarter 2019.’’
Cash flow from operating activities excluding working capital movements was $7.4 billion, also reflecting lower earnings and higher cost-of-sales adjustment, compared with the first quarter 2019.
‘’As conditions allow, the Board will continue to evaluate our capital allocation priorities between ongoing investment in our business, maintaining a strong balance sheet and increasing returns to shareholders which remains our ambition,” Holliday said.
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