Anglo-Dutch supermajor Royal Dutch Shell has posted its third-quarter results. While profits are down 80% year on year, the figures exceeded many analysts’ expectations. The company also announced a 4% increase to its dividend, with it planning to maintain this rate of increase going forward.
This year has, of course, been challenging for the oil industry, with lockdowns around the world diminishing the demand for oil and pushing down prices. In April, this prompted Shell to reduce its dividend for the first time since World War 2 as it embarked on cost-cutting exercises. The company is now planning to scale its net debt back from $73.5 billion to $65 billion, after which it intends to begin distributing as much as 30% of operations cash flow to shareholders through share buybacks and progressive dividend increases.
The company also reported improved sales and margins for its lubricant, retail and business-to-business sections, with these driving record marketing performance in the quarter.
Ben van Beurden, the CEO of Royal Dutch Shell, said the firm’s positive cash flow situation enabled it to boost dividends while still growing its future business. He also said:
“Our decisive actions taken earlier in the year have solidified our operational and cash delivery. The strength of our performance gives us the confidence to lay out our strategic direction, resume dividend growth and to provide clarity on the cash allocation framework, with clear parameters to increase shareholder distributions.”
Shares in the company rose by 4% following the announcement.