Shell cuts dividend for first time since World War II
Oil major Shell has cut its dividend for the first time since World War Two in a drastic step to preserve cash as it prepares for a protracted slump in demand for oil because of the coronavirus pandemic.
The Anglo-Dutch energy company also suspended share buybacks and said it would reduce oil and gas output by about a quarter after its net profit almost halved in the first three months of 2020 to $2.9bn (€2.7bn).
The new measures, combined with cuts in capital spending and planned cost reductions announced last month, could save Shell almost $30bn this year to help it weather the crisis and prepare for the transition to low-carbon energy.
Some investors had called on major oil firms to break the industry taboo around dividends because of the fallout from the health crisis, rather than taking on more debt to maintain payouts.
Shell said it would reduce its quarterly dividend to 16c per share from 47c, which would save it about $10bn this year if it stays at that level. Shell last changed its dividend at the start of 2014, raising it from 45c.
Shell is the first of the five so-called oil majors to cut its dividend because of the coronavirus crisis. Besides BP, Exxon Mobil has also said it will maintain its first-quarter dividend while Total and Chevron have yet to report first-quarter results.
