Shell has announced cuts to its shareholder dividend for the first time since the Second World War, as the Covid-19 pandemic triggers production disruption and financial uncertainties across the oil and gas sector.

The major announced that its share dividend for the first quarter of the year will be cut to just $0.16 per share, down from $0.16 per share previously, following significant financial struggles revealed in the company’s latest results presentation. Shell announced that shareholders lost $24m in the first quarter of the year, compared to a $6bn gain in the first quarter of 2019, as capital expenditure fell from $5.6bn to $4.9bn over this period.

“Shareholder returns are a fundamental part of Shell’s financial framework,” said Chad Holliday, chair of the board. “However, given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook, the board believes that maintaining the current level of shareholder distributions is not prudent.

“As conditions allow, the board will continue to evaluate our capital allocation priorities between ongoing investment in our business, maintaining a strong balance sheet and increasing returns to shareholders which remains our ambition.”