Shell cuts dividend for first time since WW2
LONDON: Royal Dutch Shell has cut its dividend for the first time since World War Two following the collapse in global oil demand due to the coronavirus pandemic. The energy giant also suspended the next tranche of its share buyback program. The move came as it announced a 46% fall in first-quarter net income to $2.9bn (£2.3bn). Chief executive Ben van Beurden warned of “continued deterioration in the macroeconomic outlook”. He said Shell was taking “further prudent steps to bolster our resilience” and “underpin the strength of our balance sheet”. Global demand for oil has all but dried up as lockdowns across the world have kept people inside. The collapse in the oil price has given Shell the perfect opportunity to do something it wanted to do for years. Cutting the dividend for the first time in 80 years will give the company some much-needed wiggle room. The company debt has ballooned from $1bn in 2005 to $73bn today. During that same period, it’s paid out $153bn in dividends and spent $48bn buying backs its own shares. That could not go on.