Royal Dutch Shell maintained its dividend today despite recording a massive dip in earnings during the second quarter of 2016, which it blamed partly on the continued weak oil price.
Income attributable to shareholders fell by 71 per cent to $1.18bn (£896m) from $3.99bn in the second quarter of last year. Earnings attributable to shareholders excluding exceptional items dropped 72 per cent to $1.05bn from $3.76bn.
Earnings per share fell by 94 per cent to $0.03 from $0.53.
The dividend was maintained at $0.47.
The stock has performed well since completing the BG deal - however, shares in the company were down 3.8 per cent in early trading.
Why it's interesting
Shell said its earnings were largely impacted by the weak oil price but also by its £47bn takeover of BG Group which was agreed last year. The company said that, compared with the second quarter 2015, operating expenses excluding identified items decreased by $900m before increasing by $1bn "due to the consolidation of BG".
What Shell said
Chief exec Ben van Beurden said: "Lower oil prices continue to be a significant challenge across the business, particularly in the upstream. We are managing the company through the down-cycle by reducing costs, by delivering on lower and more predictable investment levels, executing our asset sales plans and starting up profitable new projects.
"At the same time, integration of Shell and BG is making strong progress, and our operating performance continues to further improve.We are making significant and lasting changes to Shell’s working practices and cost structure. Shell is firmly on track to deliver a $40 billion underlying operating cost run rate at the end of 2016."
While the drop in earnings may be of concern, Shell investors will be appeased by the maintained dividend.