Shell raises dividend for second time in six months after first-quarter earnings beat forecasts

Shell raises dividend for second time in six months after first-quarter earnings beat forecasts [ad_1]

A emblem at a Royal Dutch Shell Plc gasoline station in Rotterdam, Netherlands, on Tuesday, April 27, 2021.

Peter Boer | Bloomberg | Getty Images

LONDON — Oil large Royal Dutch Shell on Thursday reported barely better-than-expected first-quarter earnings, amid stronger commodity costs and rising expectations of a gasoline demand restoration.

Shell additionally raised its dividend by round 4%, its second increase in six months, because the oil main seeks to reassure traders it has gained a extra steady footing. It comes after Shell slashed its payout for the primary time since World War II in April final yr.

The Anglo-Dutch firm reported adjusted earnings of $3.2 billion for the three months by means of to the top of March. That in contrast with $2.9 billion over the identical interval a yr earlier, and $393 million for the fourth quarter of 2020.

Analysts had anticipated first-quarter adjusted earnings to come back in at $3.1 billion, based on Refinitiv.

Ben van Beurden, CEO of Royal Dutch Shell, stated in an announcement that the corporate had made a “strong start” to the yr and was “ideally positioned to benefit from recovering demand.”

Shell confirmed the large winter storm that engulfed Texas in February had an combination impression of round $200 million on first-quarter adjusted earnings. It had warned this was more likely to be the case in an replace published April 7.

Shares of Shell rose round 1.3% throughout morning offers in London. The agency’s inventory worth has climbed greater than 9% year-to-date, having tumbled practically 40% in 2020.

Net debt was diminished by $4 billion over the primary three months of the yr, falling to $71.3 billion. The firm has focused lowering its whopping debt pile to $65 billion as a part of its plans for a sustainable future.

Climate plans

Shell has urged traders to participate in an advisory vote on its local weather plans on the group’s annual shareholder assembly in May.

Shell’s van Beurden has previously said the agency’s vitality transition technique, which sets out plans to become a carbon neutral company by 2050, is “designed to bring our energy products, our services, and our investments in line with the temperature goal of the Paris Agreement and the global drive to combat climate change.”

Activist shareholder group Follow This has criticized the agency’s vitality technique, saying it isn’t per the Paris Agreement — a landmark accord thought of critically necessary to cut back the chance of a local weather disaster.

Almost 200 international locations ratified the Paris climate accord in 2015, agreeing to pursue efforts to restrict the planet’s temperature enhance to “well below” 2 levels Celsius above pre-industrial ranges and to pursue efforts to cap the temperature rise at 1.5 levels Celsius.

Policymakers and enterprise leaders are below intensifying stress to ship on guarantees made as a part of the Paris Agreement forward of this yr’s COP26, as a consequence of be held in Glasgow, Scotland in early November.

‘Significant uncertainty’ forward

In its outlook for the second quarter, Shell warned of persistent “significant uncertainty” in financial circumstances, with an anticipated adverse impression on the oil and gasoline trade. The vitality large stated gross sales volumes may very well be adversely impacted and it might must take measures to curtail oil and/or gasoline manufacturing.

“Such measures will likely have a variety of impacts on our operational and financial metrics,” Shell stated.

The oil and gasoline trade was despatched right into a tailspin final yr because the coronavirus pandemic coincided with a historic gasoline demand shock, plunging commodity costs, unprecedented write-downs and tens of hundreds of job cuts.

Earlier this week, British oil main BP reported that first-quarter internet revenue had greater than tripled, largely pushed by “exceptional” gasoline advertising and marketing and buying and selling efficiency, and stronger commodity costs. It paved the best way for the vitality firm to announce plans to begin shopping for again shares.

Oil costs have climbed round 30% because the begin of the yr as expectations of a requirement restoration seem to have offset considerations in regards to the impression of rising Covid-19 infections.

International benchmark Brent crude futures traded at $67.66 a barrel on Thursday morning, up round 0.6% for the session, whereas U.S. West Texas Intermediate futures stood at $64.24, greater than 0.5% greater.

OPEC and non-OPEC allies, an influential producer group generally known as OPEC+, reaffirmed enhancing market sentiment this week when it introduced plans to stay to a phased easing of provide curbs in the approaching months.

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