Saudi Aramco oil company’s profit down 44 percent after Covid-battered year

Oil giant Saudi Aramco reported a 44 percent slump in full-year 2020 results, but maintained its $75 billion dollar dividend payout, with CEO Amin Nasser describing the last 12 months as one of the most “challenging years” in recent history.

Saudi Aramco, Saudi Arabia’s behemoth state oil firm, reported net income of $49 billion in 2020, down from $88.19 billion in 2019. The result was slightly below analysts expectations of $48.1 billion but still represents the highest of any public company globally.

“In one of the most challenging years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility,” Saudi Aramco Chief Executive Amin Nasser said in company statement Sunday.

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Aramco said revenues were impacted by lower crude oil prices and volumes sold, and weakened refining and chemicals margins.

The firm also said it expects to cut capital expenditure in the year ahead, and lowered its guidance for spending to around $35 billion from a range of $40 billion to $45 billion previously.

Free cash flow slumped almost 40 percent to $49 billion, well below the level of its hotly anticipated dividend.

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Aramco also declared a payout of $75 billion for 2020, despite concern that it would take on additional debt to maintain it.

“Looking ahead, our long-term strategy to optimize our oil and gas portfolio is on track and, as the macro environment improves, we are seeing a pick-up in demand in Asia and also positive signs elsewhere,” he added.

Shares in the top western oil and gas companies including Royal Dutch Shell and BP dropped to multi-year lows in 2020, as the coronavirus pandemic wrecked havoc across the global economy and sparked a historic collapse in the price of oil. Exxon Mobil, the largest U.S. energy company, posted its first annual loss.

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