Saudi Aramco profits nearly cut in HALF as pandemic woes cripple oil markets

Saudi state-controlled oil giant Aramco said last year’s profits saw a dramatic drop to $49 billion as the Covid-19 pandemic turned 2020 into one of the hardest years for one of the world’s most valuable companies.

The sharp slump in the company’s full-year net income totaled 44% compared to the previous year, when profits amounted to $88.19 billion. In 2018, the oil firm reported profits of $111.1 billion.

The result was slightly below the projections of $48.1 billion, but is still the highest among the world’s public corporations. Despite the massive drop in net income, Saudi Aramco managed to maintain its $75 billion dividend payout.

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“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 a statement on Sunday.

Saudi Aramco reportedly produced the equivalent of 9.2 million barrels per day of crude oil over 2020. Capital expenditure was down in 2020 to $27 billion, against $32.8 billion in the previous year.

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The company reportedly expects capital expenditure in the year ahead to be cut, and it lowered its guidance for spending to $35 billion from the previously planned $45 billion.

“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,” the top official said.

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The coronavirus pandemic wreaked havoc across the global economy, sparked an unprecedented collapse in crude prices, inevitably dragging down production volumes and refining margins.

Earlier, Exxon Mobil, the largest US oil and gas corporation, posted its first annual loss, while shares in European energy majors like Royal Dutch Shell and BP plummeted to multi-year lows last year.

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