By Rakteem Katakey: October 12, 2016
The British pound’s slump to a 30-year low is handing a windfall to U.K.-based shareholders of Royal Dutch Shell Plc and BP Plc.
The currency’s decline means the two oil companies are making higher payouts to U.K. investors when they distribute their dollar dividends in pounds. Shell and BP have pledged to prioritize defending their dividends through oil’s biggest downturn in a generation.
The companies have maintained their payouts for the past two years and shareholders who have stayed invested through crude’s slump are likely to get additional cash in the U.K. currency as the pound remains weak following Britain’s June 23 decision to exit the European Union. The potential for higher cash payouts is driving up the companies’ London-listed shares. U.S. investors get no benefit from the currency’s more than 17 percent slide against the dollar in the period, which makes the pound the worst performer among major currencies.
“In dollar terms the dividend has been flat, but in sterling terms the dividend is up quite a bit,” said Iain Armstrong, a London-based analyst at Brewin Dolphin Ltd., which owns shares in both Shell and BP. “It’s a fantastic time to be based in the U.K., being shareholders in these two companies and taking the additional cash.”
Third Quarter
Shell is scheduled to announce it’s third-quarter dividend in dollars on Nov. 1, before setting the pound exchange rate on Dec. 2 and making the payment on Dec. 16, according to its website. BP will announce the same day as Shell, convert to the U.K. currency in early December and pay on the same day as Shell.
The value of Shell’s 47 cents a share second-quarter dividend announced on July 28 has increased by about 8.6 percent from the almost 36 pence it was worth at that time to the equivalent of more than 38 pence. The value of BP’s 10 cents a share payout has also increased more than 8 percent in the period.
Shell is likely to pay about $15 billion in dividends this year, higher than last year’s $12 billion following the purchase of BG Group Plc in February, Chief Financial Officer Simon Henry said in June. BP has paid about $6 billion a year since 2012, according to Liberium Capital Ltd.
Christmas Present
Together with oil’s rise above $50 a barrel, the lure of extra cash has drawn investors to Shell and BP’s London-listed shares, Armstrong said. Shell’s B shares, the most widely traded, have increased 17 percent in London since the Brexit vote compared with a 5 percent gain for the company’s American depositary receipts in New York. BP’s London shares have surged 24 percent compared with a 9 percent gain for the U.S. stock.
Shares of European rival Total SA have increased 7 percent in Paris during the period. In New York, Exxon Mobil Corp. has dropped 2.2 percent while Chevron Corp. gained 1 percent.
About 41 percent of Shell’s B shares holders are based in Britain, according to data compiled by Bloomberg. BP has about 33 percent of its shareholders in Britain, according to the data.
“The sterling is the reason why dividend hunters paid in the British pound are actively interested in these companies,” said Jason Kenney, an Edinburgh-based analyst at Banco Santander SA. “It will be a Christmas present for U.K. dividend investors if the exchange rate remains the same.”
SOURCE ARTICLE WITH CHARTS
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
