Shell reports a sharp drop in full-year earnings and increases dividend

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

Shell reported adjusted earnings of $ 4.855 billion for the full year of 2020. This compares to a profit of $ 16.5 billion for the full year of 2019, reflecting a 71% drop. Analysts polled by Refinitiv expected full-year net income to reach $ 5.15 billion.

For the last quarter of 2020, Shell reported adjusted earnings of $ 393 million, without missing analysts ’expectations of $ 470.5 million.

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

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

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

Shell’s shareholder revenue fell 237%, to a loss of $ 21.7 billion in 2020, down from a profit of $ 15.8 billion in 2019.

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

The major energy majors endured 12 terrible months of almost all measures in 2020 and the industry faces significant challenges and uncertainties as it tries to recover.

Last year, the Covid pandemic coincided with a historic shock to demand, falling commodity prices, evaporation of profits, unprecedented declines and the reduction of tens of thousands of jobs.

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

The company’s shares have risen more than 3% to date, after falling more than 44% last year.

Shell’s results come as oil and gas giants try to reassure investors about their future profitability, pointing to a projected rise in fuel demand during the second half of the year and a massive deployment of Covid vaccines.

However, renewed blockade measures and limited worldwide mobility amid the current Covid-19 crisis have caused some of Shell’s colleagues to warn of a tough start to 2021.

Major U.S. Exxon Mobil reported Tuesday that it had lost $ 20.1 billion in the most recent quarter, while UK-based oil and gas company BP reported its first net loss in the year complete in a decade.

International benchmark Brent crude futures traded Thursday morning at $ 58.81 a barrel, up about 0.6%, while West Texas Intermediate U.S. crude futures traded at 56, $ 08, up 0.7% more.

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 have been supported by continued production cuts and the massive deployment of Covid vaccines.

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

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