Royal Dutch Shell products in Torzhok, Russia.
Andrey Rudakov | Bloomberg | Getty Images
LONDON – Oil giant Royal Dutch Shell reported a sharp drop in full year earnings on Thursday as the coronavirus pandemic weighed heavily on the global oil and gas industry.
Shell reported adjusted earnings of $ 4.85 billion for the full year 2020. That equates to a profit of $ 16.5 billion for the full year of 2019, down 71%. Analysts surveyed by Refinitiv had expected net profits of $ 5.15 billion for the full year 2020.
For the final quarter of 2020, Shell reported adjusted earnings of $ 393 million, falling short of analysts’ expectations of $ 470.5 million.
The company announced it would raise its dividend for the first quarter to $ 0.1735 per share, up 4% from the previous quarter.
Ben van Beurden, CEO of Shell, described 2020 as an “exceptional” year.
“We have taken tough but decisive action and demonstrated extremely resilient operational execution in serving our employees, customers and communities. We are coming out of 2020 with a stronger balance sheet poised to accelerate our strategy and the future of the.” Shaping energy, “said van Beurden in a statement.
Earnings attributable to Shell shareholders declined 237% to $ 21.7 billion for 2020 as a whole, from a profit of $ 15.8 billion for 2019.
Shell said this was the first full year loss since the Royal Dutch Petroleum Company and Shell Transport & Trading Company merged into one parent company in 2005.
Energy super majors had a terrible 12 months on virtually every move in 2020, and the industry faces significant challenges and uncertainties if it is to recover.
Last year, the Covid pandemic coincided with a historic demand shock, falling commodity prices, evaporating profits, unprecedented write-downs and tens of thousands of job cuts.
Shell said it reduced its net debt by $ 4 billion to $ 75 billion over the course of 2020.
The company’s shares are up more than 3% since the start of the year, after falling over 44% last year.
Outlook for 2021
Shell’s findings come from oil and gas giants trying to reassure investors about their future profitability. This points to an expected spike in fuel demand in the second half of the year and a mass adoption of Covid vaccines.
However, the renewed lockdown measures and limited mobility around the world in view of the ongoing Covid 19 crisis have caused some colleagues from Shell to warn of a difficult start into 2021.
US major Exxon Mobil reported Tuesday that it had lost $ 20.1 billion in the most recent quarter, while UK-based oil and gas company BP posted its first full year net loss in a decade.
The international reference Brent crude oil futures were trading at $ 58.81 a barrel Thursday morning, up around 0.6%, while US West Texas Intermediate crude oil futures were trading at $ 56.08, which is corresponds to an increase of more than 0.7%.
Oil prices have improved steadily since the beginning of the year, with WTI rising to its highest level in more than a year in the previous session. Crude oil futures were aided by ongoing production cuts and the mass rollout of Covid vaccines.
OPEC and non-OPEC partners, an oil producing group sometimes referred to as OPEC +, maintained their production policies on Wednesday, buoyed by rising oil prices.
The Energy Alliance said it was “optimistic” for a year of recovery in 2021.
Comments are closed.