Shell continues to raise dividend despite profit slump and lower LNG sales

The Hague-based energy giant Shell has raised its dividend again despite logging a 16 percent decline in its LNG sales and an 87 percent drop in adjusted earnings in the fourth quarter.

The firm reported adjusted earnings of $393 million for the quarter, compared to $2.93 billion the year before, due to the effects related to the Covid-19 pandemic.

Income attributable to Shell shareholders amounted to a loss of $4 billion for the quarter
which included post-tax impairment charges of $2.7 billion and charges of $1.1 billion mainly due to onerous contract provisions, it said.

Shell attributed the quarterly decline to lower realised oil and LNG prices as well as lower realised refining margins and production volumes compared with the fourth quarter last year.

The firm also announced a dividend per share growth by around 4% compared to the previous quarter where the firm also raised the dividend despite a profit slump.

Shell’s full-year adjusted earnings reached $4.8 billion, a decrease of 71 percent from $16.5 billion in 2019. The firm’s net loss climbed to $21.6 billion in 2020.

LNG volumes and sales drop

Shell sold 16.89 million tonnes of LNG in the October-December period, compared to 20.90 million tonnes in the same period last year.

Liquefaction volumes also decreased 11 percent year-on-year to 8.21 million tonnes “mainly as a result of lower feedgas availability, more maintenance and cargo timing”, Shell said.

For the full year 2020, LNG sales dropped 6 percent to 69.67 million tonnes while liquefaction volumes also decreased 6 percent to 33.25 million tonnes.

Shell’s Integrated Gas segment earned only $20 million. This included a net charge of $519 million due to the fair value accounting of commodity derivatives and a charge of $481 million related to onerous contract provisions, the firm said.

Adjusted earnings reached $1.1 billion, dropping 44 percent on lower realised prices for LNG, oil and gas, and lower contributions from trading and optimisation, Shell said.

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