Shell, the world oil giant has slashed its dividend for the first time since the Second World War on Thursday.
The shareholder payments have been cut by 67% as coronavirus pandemic decreased demand for commodities and shattered the oil-producing industry.
In a statement issued on Thursday, Shell said that it was cutting its share dividend from $0.47 to $0.16 as it posted significantly lower quarterly earnings.
Shell chief executive Ben van Beurden, said: “Given the continued deterioration in the macroeconomic outlook and the significant mid and long-term uncertainty, we are taking further prudent steps to bolster our resilience, underpin the strength of our balance sheet and support the long-term value creation of Shell.
“Starting this quarter, the Board has decided to reduce our quarterly dividend to 16 US cents per share.”
Royal Dutch Shell, chair of the board, Chad Holliday said: “As conditions allow, the Board will continue to evaluate our capital allocation priorities between ongoing investment in our business, maintaining a strong balance sheet and increasing returns to shareholders which remains our ambition.”
Shell shares were hit by the news, reacting negatively, with the company’s A and B shares – which are both listed on London’s FTSE 100 – dropped around 6% as of 5.30 a.m. ET.