Royal Dutch Shell has reaffirmed its decades-long dedication to rising shareholder payouts, solely months after chopping the dividend for the primary time because the second world conflict.
Reporting a modest revenue for the third quarter, Shell mentioned it might pay buyers a dividend of 16.65 cents for the three-month interval.
Final yr it reduce payouts to 16 cents a share from 47 cents due to the “disaster of uncertainty” going through oil firms amid the coronavirus pandemic.
Shell, once the FTSE 100’s biggest dividend payer, set out the 4% payout sweetener alongside its upbeat outcomes. Adjusted earnings have been $955m, simply beating analyst forecasts of a $146m revenue, however nonetheless effectively beneath the $4.76bn recorded for a similar quarter final yr amid the collapse of world oil costs.
Ben van Beurden, the chief government, mentioned Shell’s “decisive actions” to stem the affect of coronavirus and “sector-leading” money flows enabled it to extend shareholder dividends.
The corporate mentioned it provided buyers a “world-class funding case”, regardless of the shift to low-carbon power, by promising to spice up the dividend on an annual foundation.
“The power of our efficiency provides us the arrogance to put out our strategic path, resume dividend progress and to supply readability on the money allocation framework, with clear parameters to extend shareholder distributions,” Van Beurden mentioned.
Shell reduce the FTSE 100’s greatest dividend in April earlier than reporting a net loss of $18.3bn for the second quarter of 2020, down sharply from a web revenue of $3bn over the identical interval final yr and $2.7bn within the first three months of 2020.
The corporate reduce the worth of its oil and gasoline property, alongside a lot of its rivals, as market costs tumbled in response to falling demand for transport fuels this yr.
Shell decreased the worth of those property by means of a post-tax impairment cost of $16.8bn within the second quarter, and reported one other writedown of virtually $1bn on its Australian gas project, Prelude, in its third-quarter outcomes.
Earlier this yr, Shell mentioned it anticipated oil costs to common $35 a barrel in 2020, rising to $40 in 2021, $50 in 2022 and $60 in 2023. The typical oil value final yr was $64.36 a barrel.