Royal Dutch Shell Plc, a British-Dutch energy company, is cutting dividends for the first time since World War II after a collapse in oil prices caused by the coronavirus pandemic.
In Q1 of 2020 the company has reduced earnings by almost 50%.
Shell said it would pay quarterly dividends of 16 cents per share, compared to 47 cents that it paid each quarter in 2019. The company has not cut dividends since the 1940s.
Shell’s adjusted profit margin for changes in manufacturing costs (CCS) in the first quarter was $2.756 billion, compared with $5.293 billion for the same period in 2019.
The company plans to reduce oil and gas production in the II quarter to 1.75-2.25 million barrels of oil equivalent per day from 2.7 million in the I quarter.
The International Energy Agency (IEA) expects energy demand to fall by 6% this year amid the coronavirus pandemic. In absolute terms, this is the largest decline in the entire history of observations.
Shell said last month that it would cut spending by $5 billion to below $20 billion in 2020. The company also suspended its $25 billion share buyback plan amid falling energy prices.