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Shell's 2020 profit plunges to its lowest in two decades

By Ramla Soni

11:00, 4 February 2021

Shell's 2020 profit

Last year profit at Royal Dutch Shell fell to its lowest in at least two decades as the coronavirus pandemic hit global energy demand. 

Annual profit dropped 71 per cent to $4.8bn (€4bn, £3.5bn) as its oil and gas production and profits from refining crude into fuels fell significantly.

However, Shell said it planned to raise its dividend in the first quarter of 2021.

“We are coming out of 2020 with a stronger balance sheet,” CEO Ben van Beurden said in a statement.

US rivals Exxon Mobil and Chevron also reported huge losses in 2020, due to a fall in oil demand. BP’s loss was its first in a decade at $5.7bn while Exxon reported a $22.4bn annual loss, it’s first as a public company.

Shell’s results come weeks before it presents its strategy to become a net zero emissions company by 2050 and tries to persuade investors that it has a profitable future in a low-carbon world. 

The company is planning a major restructuring as part of its plan to reduce greenhouse gas emissions and aims to cut 9,000 jobs, or more than 10 per cent of its workforce.

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The restructuring will lead to annual savings of about $2bn to $2.5bn by 2022.

Shell also invested $17.8bn in new projects in 2020, about $6bn less than a year earlier, and slashed its operating costs by 12 per cent to $32.5bn, helping its cash flow. 

Analysts said that while Shell missed forecasts for both its fourth-quarter profit and cash flow, the results overall were not as bad as expected. 

Shares in Shell fell last year along with rivals to hit 878.1 pence on October 28, their lowest in more than a quarter of a century. 

They have recovered since but are still down 40 per cent since the end of 2019.

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