Nufarm to stop making of some products
LONDON: Royal Dutch Shell said on Tuesday it would write off assets worth up to $22 billion after the coronavirus crisis knocked oil and gas demand and weakened the energy price outlook.
The Anglo-dutch company has already been preparing a major overhaul after CEO Ben van Beurden laid out plans in April to reduce Shell’s greenhouse gas emissions to net zero by 2050.
Global travel restrictions to prevent the virus spreading affected more than 4 billion people at one point, taking cars off the roads and grounding planes, driving down fuel demand.
Shell, the world’s largest fuel retailer, said it expected a 40% drop in sales in the second quarter from a year earlier to about 4 million barrels per day (bpd), although that is more than its earlier prediction of a drop to 3.5 million bpd.
In its update before second-quarter results on July 30, Shell said upstream oil and gas production was expected to average 2.35 million bpd in the three months to June, down from 2.71 million bpd in the first quarter.
Shell, which has a market value of $126.5 billion, said it would take an aggregate post-tax impairment charge of $15 billion to $22 billion in the second quarter. Its shares were down 2%. Credit Suisse analyst Thomas Adolff said the second quarter would be the toughest for many companies and Shell had sent a “wake up call.”
Shell’s move follows BP’S decision to wipe off up to $17.5 billion from its assets, as it responds to the coronavirus crisis and shifts to low-carbon energy.
Shell responded to the epidemic by cutting its dividend for the first time since World War Two and cutting spending in 2020 to a maximum of $20 billion from $25 billion. It aims to announce its restructuring plan by the end of 2020.
SYDNEY: Australia’s Nufarm said that it would cease making insecticides and fungicides at its local site and reduce herbicide manufacturing in Austria, less than a month after warning of sluggish demand due to the coronavirus outbreak.
The agricultural chemicals maker had highlighted the pressure on its European business, where it was facing weaker demand and logistical challenges.
The Melbourne-based firm said its Raymond Road site in Australia, where it manufactures insecticides and fungicides, will be closed and sold over the next 18 months.
Nufarm expects to generate core earnings of up to A$15 million ($10.3 million) per year on implementation of the initiatives.
The company said one-off cash costs of A$25 million related to the restructuring will be partially offset by proceeds from the future sale of its Australian property.
Meanwhile, authorities ordered the lockdown of 36 suburbs in Australia’s second biggest city Melbourne in an attempt to stop a spike in coronavius cases, a dramatic departure from the relaxation of restrictions elsewhere in the country.
From midnight on Wednesday the first suburb-specific stay-home order will be imposed on some 320,000 people, the Victorian state Premier Daniel Andrews told a news conference on Tuesday.
Residents in the suburbs must stay home unless travelling for work, school, healthcare, exercise or food for a period of four weeks.