COVID-19 greatly affected Aramco, but the company made a profit of $ 49 billion and will pay dividends to shareholders worth $ 75 billion.
Saudi state oil giant Aramco has reported 44.4% of last year’s net profit as the coronavirus pandemic slowed global demand.
The COVID-19 effect greatly affected the company and its partners in 2020, but oil prices have risen this year as economies recover from the recession and after oil producers widen the cuts of production.
“Aramco achieved a net profit of $ 49 billion in 2020,” the company said in a statement Sunday, below $ 88.2 billion in 2019.
He said “revenues were affected by lower prices and volumes of crude oil sold, and weakened refining and chemical margins.”
Aramco CEO Amin Nasser described 2020 as “one of the toughest years in recent history.”
But compared to many of its loss-making international peers, the company, which debuted on the stock market in 2019, played its “strong financial resistance” despite the challenges and said shareholders would still receive dividends for an amount of $ 75 billion.
“We’re glad there are signs of recovery,” Nasser said in a earnings call. “China is also very close to pre-pandemic levels. Thus, in Asia, especially in East Asia, there is a strong recovery in demand.
He said demand in Europe and the United States would improve with increased deployment of COVID-19 vaccines. Global oil demand is expected to reach 99 million barrels per day by the end of this year, he added.
Crude oil prices have risen in recent weeks to more than $ 60 a barrel.
“Huge impact” of COVID
Analysts say the company’s debt levels rose last year as it offered shareholders an impeccable dividend even when its profits fell.
Aramco reduced its focus on capital spending in 2021 to about $ 35 billion, from $ 40 billion to $ 45 billion previously, according to a disclosure on the kingdom’s Tadawul stock exchange. Capital expenditure in 2020 was $ 27 billion.
Referring to the dividend, Nasser said there was no intention to increase it this year from what has been promised.
“The dividend is in line with expectations, which is what Aramco’s holders will be most concerned about, but lower capital means the company doesn’t expect high oil prices to last long,” Hasnain Malik said. , head of equity research at Tellimer.
Aramco shares fell slightly 0.6 percent after their results.
For most of last year, Aramco’s shares held up well against global oil companies in emerging and developed markets, but outperformed their peers when oil prices recovered.
Without addressing the company’s debt, Arassco’s Nasser said the belt strengthening had kept the company’s financial position “robust,” allowing it to pay dividends.
“Because the huge impact of COVID-19 was felt throughout the global economy, we intensified our strong emphasis on operational and capital efficiency,” Nasser said.
Aramco has also cut hundreds of jobs as it seeks to cut costs, Bloomberg News reported last June.
But there are also concerns about increased drone and missile attacks on Aramco’s facilities in the kingdom, claimed by Yemen’s Houthi rebels.
A drone strike sparked a fire at a Riyadh oil refinery on Friday, in the second major assault this month on Saudi energy facilities claimed by the group aligned with Iran.