A 4% bump in the dividend and the recent strength in oil prices wasn’t enough to get investors excited about the latest numbers from Royal Dutch Shell (RDSB) as the shares fell 1.2% to £12.57.
The increase in the dividend is a drop in the ocean when you consider it was cut by two thirds in April 2020.
The company has reported a ‘stronger balance sheet’ in its Q4 and full year results, reducing net debt materially, and exceeding cash preservation targets, but revealed a difficult year for the firm.
Shell reported a loss of almost $4 billion for the quarter, bringing the total loss for the year to $21.5 billion.
The group reported net debt down $4 billion to $75 billion during 2020, driven by a decrease in capital expenditure, down to $18 billion in 2020 from $24 billion in 2019.
Chief executive officer, Ben van Beurden, said: ‘We have taken tough but decisive actions and demonstrated highly resilient operational delivery while caring for our people, customers and communities. We are coming out of 2020 with a stronger balance sheet, ready to accelerate our strategy and make the future of energy.’
This is the key challenge facing Shell and its rivals, how does it invest in future alternative energy assets, at a time of rising prices and competition for said assets and when its traditional oil and gas business faces a big slump in demand?
In a statement the group said that LNG prices for the quarter were significantly below Q4 2019, while oil products showed weakness in refining margins, despite some recovery from Q3 2020, due to lower intake and utilisation owing to lower demand and a shutdown of its Convent refinery.
