Shell has cut its dividend for the first time since the Second World War, ending a run of ever-larger shareholder returns that has lasted for almost a century.
Shareholders, which include thousands of pension funds, were told that their chunky dividend – the largest from a London-listed firm in the UK – was being slashed by two thirds following the collapse in global oil demand.
The move comes as Shell attempts to shore up its finances amid the worst crisis in the oil market’s history.
Covid-19 has decimated demand for fossil fuels, as economies are placed into deep freeze in an attempt to curb the spread of the virus.
The pandemic has triggered a collapse in global oil prices to record lows, pushing Shell’s profits for the first three months the year down 46pc to $2.9bn compared with the same period last year.
Ben van Beurden, Shell’s chief executive, said: “Under extremely challenging conditions … 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, he added, the board had decided to reduce Shell’s quarterly dividend to 16 US cents a share.
It marks the first time since 1945 that the company has cut its dividend.
Source: The Telegraph