Saturday 08 August 2020

Shell posts loss of $18bn in Q2, as pandemic hits oil prices

Promoting the sale of LNG at a trade fair. Photo: Shell

Anglo-Dutch oil giant Shell has been hard hit by the coronavirus crisis, booking a net loss of €18.1bn (€15.4bn) in the second quarter of the year, largely due to impairment charges from a lower short-term oil and gas price outlook.

In addition, the April and May lockdowns led to reduced petrol sales and the aviation industry was at a virtual standstill, hitting kerosene sales as well. Lower oil prices added to the problems and oil prices are still below pre-pandemic levels.

Nevertheless, the company booked ‘adjusted earnings’ of $638m, when analysts had expected a loss in the region of $664m, the FD reported, and Shell shares rose on the Amsterdam stock exchange in early trading. Last year the company made net profit of some €3bn during the same period.

‘Shell has delivered resilient cash flow in a remarkably challenging environment,’ CEO Ben van Beurden said in a statement. ‘We continue to focus on safe and reliable operations and our decisive cash preservation measures will underpin the strengthening of our balance sheet.’

The company warned last month it may slash the value of its oil and gas assets by up to $22bn because of falling demand. In April, Shell cut its dividend for the first time since WW11, cutting payments by 66%.

Van Beurden recently hinted that the company might ditch its Dutch headquarters, but no reference is made to any potential departure in the Q2 statement.

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