Saudi Aramco sees 2020 profits drop to $49 billion
Saudi Arabia’s state-backed oil giant Aramco announced Sunday that its profits nearly halved in 2020 to $49 billion, a big drop that came as the coronavirus pandemic roiled global energy markets.
Saudi Aramco committed to spending less this year than it had anticipated; Aramco said it planned to spend about $35 billion in 2021 on capital expenditures; down sharply from its previous estimate of $40 billion to $45 billion.
“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 company statement Sunday.
Aramco said revenues were impacted by lower crude oil prices and volumes sold and weakened refining and chemicals margins.
“Our reliability in 2020 despite Covid-19 and these attacks on different parts of our facilities in the north and the south and in Ras Tanura lately is 99.9%,” Nasser said. “It’s even higher than previous years.”
It’s a further demonstration about the robust crisis management and continuity plans that we have.”
Despite the 44% drop in net income; Aramco said it would stick to its promise of paying quarterly dividends of $18.75 billion; $75 billion a year; due to commitments the company made to shareholders in the run-up to its initial public offering.
Nearly all of the dividend money goes to the Saudi government, which owns more than 98% of the company.
Aramco’s policy to pay dividends significantly higher than its 2020 free cash flow of $49 billion stands in sharp contrast to other oil giants that have cut payouts.
Seeking a cash infusion to pay the billions of dollars in the face of dwindling revenue; Aramco recently has issued international bonds.
