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Oil: Saudi giant Aramco's profits plummet

2021-03-21T08:55:36.099Z

Energy giant Saudi Aramco on Sunday announced a 44.4% drop in net profit in 2020, weighed down by falling crude oil prices accentuated by the coronavirus pandemic, which has weighed heavily on global demand. "Aramco achieved a net profit of 49 billion dollars (41 billion euros) in 2020", against 88.2 billion dollars (73.8 billion euros) the previous year, the Saudi company said in a statement. Th



Energy giant Saudi Aramco on Sunday announced a 44.4% drop in net profit in 2020, weighed down by falling crude oil prices accentuated by the coronavirus pandemic, which has weighed heavily on global demand.

"Aramco achieved a net profit of 49 billion dollars (41 billion euros) in 2020", against 88.2 billion dollars (73.8 billion euros) the previous year, the Saudi company said in a statement.

The world's largest exporter of crude oil, Saudi Arabia was hit last year by low oil prices and sharp cuts in production.

"Revenues have been affected by lower crude oil prices and volumes sold, as well as reduced margins on refining and chemicals," says the company, which says it "has demonstrated strong financial resilience in one of the most difficult times for the industry ”.

In recent weeks, crude prices have risen above $ 60 a barrel, a first in a year, but analysts believe that possible new waves of coronavirus contamination could jeopardize the timid global economic recovery.

Aramco, considered Saudi Arabia's cash cow, has revealed two consecutive annual declines in profits since the company began reporting 2019 results. ambitious multi-billion dollar plans to diversify its oil-dependent economy.

Last year, the energy juggernaut had already posted annual net profit for 2019 down 20.6% from 2018. Despite the situation, Aramco claimed to have paid $ 75 billion in dividends to its shareholders. , an amount that exceeds the declared profit, as it had committed during its IPO with great fanfare in 2019.

The oil giant debuted on the Riyadh stock exchange in December 2019 following a then record IPO, which generated $ 29.4 billion from the sale of 1.725% of its shares.

Despite the pandemic, "we have placed even more emphasis on the profitability of our capital and our operational efficiency", enough to allow the payment of dividends, said Aramco CEO Amin Nasser.

Aramco's dividend payments are helping the Saudi government, the company's largest shareholder, manage the kingdom's abysmal budget deficit.

The Saudi giant, on the other hand, will cut its capital spending in 2021. "The company (...) projects its capital spending for 2021 to be around $ 35 billion, much less than the roughly $ 40-45 billion. “First considered,” said the press release.

To cope with the moribund economic situation, Aramco has also cut hundreds of jobs to cut costs, the Bloomberg agency reported in June.

The sharp drop in oil revenues is expected to hamper the ambitious plans of Crown Prince Mohammed bin Salman, as the diversification of the economy he advocates must be largely financed by energy revenues.

In January, he announced his country's intention to sell more Aramco shares in the coming years, with the money generated to be transferred to the Public Investment Fund, the main instrument of the country's diversification policy. economy of the country.

But given the economic and health situation, these sales of additional shares may not arouse the interest of investors, analysts say.

Source: lefigaro

All news articles on 2021-03-21

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