Shell reports a sharp drop in profit for the whole year, increases the dividend

LONDON – Oil giant Royal Dutch Shell on Thursday reported a sharp drop in profit for the whole year as the coronavirus pandemic strongly claimed the global oil and gas industry.

Shell reported adjusted earnings of $ 4.85 billion for the full year 2020. That compares with a profit of $ 16.5 billion for the full year 2019, reflecting a 71% decline. Analysts surveyed by Refinitiv expected net profit for the full year 2020 to be $ 5.15 billion.

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

The company said it would increase its dividend in the first quarter to $ 0.1735 per share, an increase of 4% from the previous quarter.

Shell CEO Ben van Beurden described 2020 as an ‘extraordinary’ year.

“We have taken tough but decisive action and shown very resilient business performance while caring for our people, customers and communities. We come from 2020 with a stronger balance sheet, ready to accelerate our strategy and create the future of energy,” Beurden said in a statement.

Revenue attributable to Shell shareholders collapsed by 237% to a loss of $ 21.7 billion in the full year 2020, compared to a profit of $ 15.8 billion in the full year 2019.

According to Shell, this is the first annual headline loss since the merger of Royal Dutch Petroleum Company and Shell Transport & Trading Company into one parent company in 2005.

Energy super majors endured an awful twelve months for almost every partner in 2020 and the industry faces significant challenges and uncertainties as it tries to recover.

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

According to Shell, its net debt decreased by $ 4 billion to $ 75 billion over the course of 2020.

The company’s shares are more than 3% higher than the previous year, and fell by more than 44% last year.

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

However, renewed lock-in measures and limited mobility worldwide amid the ongoing Covid-19 crisis have led some of Shell’s counterparts to warn of a difficult start to 2021.

The American big Exxon Mobil reported on Tuesday that it lost $ 20.1 billion in the last quarter, while the British oil and gas company BP showed its first full year net loss in a decade.

International standard Brent crude futures traded at $ 58.81 a barrel on Thursday morning, about 0.6%, while US West Texas Intermediate crude futures stood at $ 56.08, more than 0.7% whore.

Oil prices have been steadily improving since the beginning of the year, with WTI rising to its highest level in more than a year in the previous session. Crude contracts are supported by ongoing production cuts and the massive deployment of Covid vaccines.

OPEC and non-OPEC partners, an oil producers’ group sometimes referred to as OPEC +, maintained their production policies on Wednesday, driven by rising oil prices.

The Energy Alliance said it was “optimistic” for a year of recovery in 2021.