Shell reports a sharp decline in year-round profit, increasing dividends

LONDON – Oil giant Royal Dutch Shell on Thursday reported a sharp drop in year-round profit as the coronavirus pandemic severely affected the global oil and gas industry.

Shell reported adjusted earnings of $ 4.85 billion for the full year 2020. This compared to a profit of $ 16.5 billion for the full year 2019, reflecting a decrease of 71%. Analysts surveyed by Refinitiv expected net income for 2020 to reach $ 5.15 billion.

For the last quarter of 2020, Shell reported adjusted earnings of $ 393 million, missing analysts’ expectations of $ 470.5 million.

The company said it will raise its first-quarter dividend to $ 0.1735 a share, up 4% from the previous quarter.

Shell CEO Ben van Beurden described 2020 as an “extraordinary” year.

“We have taken tough but decisive action and demonstrated an extremely resilient operational delivery, while caring for our people, customers and communities. We are coming out of 2020 with a stronger balance sheet, ready to accelerate our strategy and make the future of energy,” van Beurden said in a statement.

Revenues attributed to Shell shareholders collapsed by 237%, to a loss of $ 21.7 billion in the full year 2020, down from a profit of $ 15.8 billion in the full year 2019.

Shell said this was the first year-long loss of title since the merger of Royal Dutch Petroleum Company and Shell Transport & Trading Company into a parent company in 2005.

The energy supermajors have endured 12 terrible months with almost every measure in 2020, and the industry is facing significant challenges and uncertainties as it tries to recover.

Last year, the Covid pandemic coincided with a historic shock to demand, falling commodity prices, evaporating profits, unprecedented cuts and tens of thousands of job cuts.

Shell said it reduced its net debt by $ 4 billion to $ 75 billion by 2020.

The company’s shares have risen by more than 3% so far, after falling by more than 44% last year.

Shell’s results come as oil and gas giants try to reassure investors about their future profitability, indicating an expected increase in fuel demand in the second half of the year and a mass launch of Covid vaccines.

However, renewed blockades and limited global mobility amid the ongoing Covid-19 crisis have led some of Shell’s colleagues to warn of a tough start to 2021.

The large US Exxon Mobil reported on Tuesday that it lost $ 20.1 billion in the last quarter, while the British oil and gas company, BP, recorded the first net loss in a decade.

The brent international futures index traded at $ 58.81 a barrel on Thursday morning, up about 0.6%, while US West Texas Intermediate gross futures traded at $ 56.08. by over 0.7% higher.

Oil prices have steadily improved since the beginning of the year, with the WTI rising to its highest level in more than a year in the previous session. Gross futures were supported by reductions in production and the mass launch of Covid vaccines.

OPEC and non-OPEC partners, a group of oil producers sometimes called OPEC +, maintained their production policy on Wednesday, backed by rising oil prices.

The energy alliance has said it is “optimistic” for a year of recovery in 2021.