Ben Geman AXIOS APRIL 30, 2020
Photo: Valery Matytsin\TASS via Getty Images
Royal Dutch Shell said Thursday that it's cutting shareholder dividends for the first time since World War II as the company reported a steep drop in quarterly profits.
Why it matters: The decision underscores how the coronavirus-fueled collapse in prices and demand is upending the oil landscape and forcing even the most powerful companies to scramble to protect their finances.
Shell, which like other companies is also steeply cutting capital spending, said in announcing the dividend cut that "the deterioration in the macroeconomic and commodity price outlook" due to COVID-19 is "unprecedented."
"The duration of these impacts remains unclear with the expectation that the weaker conditions will likely extend beyond 2020," the company warned.
Driving the news: Shell said it would reduce its first quarter dividend to 16 cents per share, a 66% cut. If that reduction is maintained all year, Shell will save about $10 billion, Reuters reports.
The company reported $2.9 billion in Q1 net profits, which is down 46% from the same period a year ago.
What's next: U.S.-based multinational giants Exxon and Chevron report their earnings Friday.
Go deeper: Oil industry has more bleak days ahead as coronavirus crushes demand
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