Oil supermajor Royal Dutch Shell (RDS.A) (RDS.B) reported an $18.1 billion net loss in Q2 2020, as oil prices and energy demand slumped due to the coronavirus pandemic.
It was only the company's third quarterly net loss in the last decade and the first time it has ever reported consecutive quarterly net losses, following a $24 million net loss in Q1. Those Q1 results prompted the company to slash its dividend for the first time since World War II.
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Real numbers
As an Anglo-Dutch company, Shell reports results slightly differently than U.S.-based oil supermajors ExxonMobil and Chevron, which will announce their own earnings on Friday.
On a "net current-cost-of-supplies (CCS) basis," Shell reported a $18.4 billion loss, with adjusted earnings per American depositary share of $0.16, excluding identified items. That adjusted figure beat Wall Street's expectation of a $0.31-per-share loss. Production declined about 7% year over year, to 2.4 million barrels of oil equivalent per day (BOE/D).
Unsurprisingly, all of these figures were down significantly from the year-ago quarter.
What it all means
The results would have been much worse if it hadn't been for Shell's trading activities, which allowed the company to profit off of the volatility of energy prices. CFO Jessica Uhl said it was the best quarterly performance on record for Shell's trading unit.
Despite that success, Shell's Q3 outlook is gloomy. It expects its oil production to continue to decline, to between 2.1 million and 2.4 million BOE/D, and forecasts an average 2020 Brent crude price of $35 per barrel.
Expect more doom and gloom from the oil industry as earnings season continues.
