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Home / Business / Shell’s second-quarter profit declines 82% due to coronavirus affected by oil prices, energy demand

Shell’s second-quarter profit declines 82% due to coronavirus affected by oil prices, energy demand



Carl Court | AFP | Getty Images

Oil giant Royal Dutch Shell on Thursday reported a sharp decline in net income for the three months to the end of June after an unprecedented period of turbulence in the energy market and significantly lower oil and gas prices.

The Anglo-Dutch company reported adjusted earnings of $ 638 million for the second quarter of 2020. Compared to net income of $ 3.5 billion for the same period last year and $ 2.9 billion for the first three months of 2020.

Analysts have warned that “Big Oil”

; companies, referring to the world’s largest energy companies, are likely to report “terrible” results in the second quarter, as coronavirus blocking measures coincide with an unrivaled demand shock.

The continuing economic impact of the pandemic on coronaviruses has forced Shell to announce that it is expected to decline by as much as $ 22 billion in the second quarter.

In a note to shareholders published on June 30, which came shortly after a similar announcement by its colleague BP, Shell said it now expects significantly lower oil and gas prices over the next 30 years.

The bleak outlook for commodity prices until 2050 followed Shell’s decision, for the first time since World War II, in the first quarter of 2001 to reduce dividends to shareholders.

The company’s board of directors at the time explained that maintaining the current level of shareholder distribution was “unreasonable” and thus reduced dividends by almost two-thirds.

Shell now believes that Brent oil futures will average $ 35 per barrel in 2020, compared to its previous forecast of $ 60 at the international benchmark.

The company also lowered its Brent price forecast to $ 40 in 2021 and $ 50 in 2022, previously stating that it expected an average price of $ 60 in each year.

Brent crude futures traded at $ 43.71 a barrel on Thursday morning, about 0.1% lower, while futures futures in US West Texas reached $ 41.22, down 0.15%.

Both Exxon Mobil and Chevron are expected to reveal their earnings in the second quarter on Friday, with the British company BP preparing to report on August 4.


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