On Thursday 30 April 2020, Royal Dutch Shell plc released its first quarter results and first interim dividend announcement for 2020.
CCS earnings attributable to shareholders excluding identified items were US$2.9 billion, 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. This was partly offset by favourable movements in deferred tax positions and lower operating expenses.
Cash flow from operating activities excluding working capital movements was US$7.4 billion, reflecting lower earnings and higher cost-of-sales adjustment, partly offset by higher cash inflows related to commodity derivatives and lower tax payments, compared with 1Q19.
Total dividends distributed to shareholders in the quarter were US$3.5 billion. During the quarter, Shell completed another tranche of the share buyback programme. Since the launch of the programme, Shell has bought back almost US$16 billion in shares for cancellation.
Royal Dutch Shell CEO Ben van Beurden commented: “Under extremely challenging conditions, Shell is stepping up to protect our people and support communities around the globe while delivering strong safety and operational performance across our business. Our Integrated Gas and Marketing businesses continued to achieve robust results this quarter, bringing resilience to our cash flows. In March, we took decisive actions to reduce our spending, increase our liquidity and position our business to manage the deteriorating macroeconomic and commodity price outlook. Our integrated business model, the high quality of our assets and the resourcefulness of our people have allowed us to respond swiftly.
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. Starting this quarter, the Board has decided to reduce our quarterly dividend to 16 US cents per share.”
Chair of the Board of Royal Dutch Shell Chad Holliday added: “Shareholder returns are a fundamental part of Shell’s financial framework. However, given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook, the Board believes that maintaining the current level of shareholder distributions is not prudent. Following the announcement not to continue with the next tranche of the share buyback programme, the Board has also decided to reduce the first quarter 2020 dividend and reset to 16 US cents per share.
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.”
Read the article online at: https://www.hydrocarbonengineering.com/special-reports/01052020/shell-cuts-quarterly-dividend-to-16-us-cents-per-share/