Royal Dutch Shell swings to a net loss in the fiscal second quarter

Royal Dutch Shell (AMS: RDSB) revealed to have swung to a net loss in the second quarter on Thursday. The company attributed its dovish performance to impairments and a sharp decline in margins, volumes, and prices at large. The company also announced to have decided in favour of slashing its interim dividend to shore up finances. Shell also announced to have written down its Nigerian license on Thursday.

Shares of the company tanked more than 2% on market open on Thursday. At £12.21 per share, Royal Dutch Shell is roughly 50% down year to date in the stock market after recovering from an even lower £9.65 per share in March. Learn more about how to invest in the stock market.

Shell reports £14.16 billion of CCS loss in Q2

On CCS (current cost of supply) basis, Shell reported a quarterly loss of £14.16 billion in the second quarter that came in significantly weaker than a profit of £2.33 billion in the same quarter last year.

In terms of net loss in Q2, the oil company posted £13.97 billion on the back of £12.95 billion of impairment ascribed to the downbeat forecasts for oil and gas prices. The company had previously forecast to £17.90 billion of write-downs in the second quarter.

Excluding identified items, Shell said that its profit on CCS basis came in at £491.64 million in Q2 that represents a massive 82% decline as compared to £2.67 billion in the comparable quarter of last year. The CCS profit, however, was stronger than £519.38 million of CCS loss that experts had forecast on an adjusted basis.

Shell declares 12.33 pence a share of interim dividend

Shell’s board declared 12.33 pence a share of interim dividend on Thursday that remained unchanged from the company’s first quarter. In the same quarter last year, however, Shell had declared a much higher interim dividend for Q2 of 36.22 pence a share.

For the fiscal third quarter, the Netherlands-headquartered company expressed plans of production cuts. According to Shell:

“Due to demand or regulatory requirements and/or constraints in infrastructure, Shell may need to take measures to curtail or reduce oil and/or gas production, LNG liquefaction as well as utilisation of refining and chemicals plants and similarly sales volumes could be impacted.”

At the time of writing, the British-Dutch multinational oil and gas company has a market cap of £92.87 billion and a price to earnings ratio of 13.01.