Shell profit slumps by 71% on Covid-19 downturn

Photo: Shell Ben van Beurden

The oil giant Royal Dutch Shell announced financial results which are the worst in more than 20 years, Reuters reported. The company attributed the negative results to the Covid-19 driven global slowdown in world economy, transport and travel restriction due to lockdowns and low oil prices. Shell however vowed to raise its dividends.

The 2020 earnings are down by 71% to$4,8bn touching lowest levels posted in 2000. Shell’s debt-to-equity ratio rose throughout the year but the oil company was able to avoid the huge losses of its rivals, partly thanks to strong results from its network of more than 45,000 filling stations around the world. “We are coming out of 2020 with a stronger balance sheet,” Chief Executive Ben van Beurden said in a statement.

Its fourth-quarter profit fell 87% from a year earlier to $393 million - missing analyst forecasts for a profit of $597 million - dragged down by weak liquefied natural gas prices, lower production and weak refining margins.

In a sign of confidence, Shell said it expected to raise its dividend for the first quarter of 2021 by 4% from the previous quarter.

Shell’s net debt at the end of the fourth quarter raised about $2 billion on the previous quarter to $75,4 billion, with its gearing - or debt-to-equity ratio - ticking up to 32,3%.

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