The COVID 19 pandemic caused Shell, a major oil company headquartered in the Netherlands, also measured as the world’s third largest company, to slash its dividend for the first time since the second world war in 1939.
The announcement was made on Thursday and the company cut 67% of shareholder payments.
The fall in oil prices from $57, to $30, to $20 and to a negative figure has done significant damage to the company’s revenue.
In the statement Shell released, the company revealed that it will be cutting off $0.31 from their share dividend.
The shares dividend was at $0.47 and will be cut to $0.16 as its quarterly revenue was significantly lower.
The oil company’s Current Cost of Supplies (CCS), earnings fell by almost half at 47%.
The Current Cost of Supplies refers to a company’s net income after adjusting for the decrease or increase in expenses over an accounting period.
Crude oil prices has seen a significant crash since the COVID-19 pandemic began. Demand for Crude oil is so little and storage facilities across the world are full.
On Monday, April, Crude oil prices worsened when Crude oil in the United States fell to a negative. The world’s lowest crude oil price in the product’s history.
Crude oil producers in the United States had to pay buyers to get rid of the excess crude oil since renting storage barrels and tankers became too expensive for the producers to manage. The price fell to $- 37.63 per barrel on Monday 20th of April.
