Today Shell came with an update on fourth quarter of 2015. These are the unaudited results. This because next week a special shareholders meeting will be held on the take over of BG.
As was to be expected the net profit has been slashed due to the oil prices. As we all know the oil prices are at a 12-years low (and still going down). Their cash flow from operations is expected in the range of $29.2 – $30.4 billion. (2014: approx. $ 45 billion).
The net profit over 2015 will be in the range of $10.4 – $10.7 billion. In 2014 it was around $ 15 billion!
Of course shell will be taking a sorts of actions to improve their profit. On the basis of the information given, I have a good feeling about the company’s management. But what about my dividend? This is an important thing for a DGI .
Luckily their update also gave information about their dividend.
Underscoring Shell’s commitment to returns to shareholders, dividends declared for 2015 are expected to be $1.88/share or $12 billion, and for 2016 at least $1.88/share or, assuming successful completion of the combination, $15 billion in total.
So the management has the intention to leave the dividend untouched, also for this year. This is good!
On the basis on the update it can be concluded that their payout ratio will be very high! And they need to take serious action in 2016 to secure the dividend for 2017. And, yes I understand that if the oil prices will rise again, it will be much easier for Shell.
As a shareholder I will not take action at this point. First lets see what the results of the action by the management will be. I have full confidence but I will be watching the stock closely.
My Vrijheid Fonds consist of 320 shares of RDS. So my projected net dividend income for 2016 will be approx. € 470.
What do you think about Royal Dutch Shell? If you have money invested in RDS, are you going to take action? Let me know.