Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Saudi Aramco's profit plunges, sees signs of oil market recovery

share with twitter share with LinkedIn share with facebook
08/10/2020 | 12:27am EDT
FILE PHOTO: Logo of Aramco is seen as security personnel walk before the start of a press conference by Aramco at the Plaza Conference Center in Dhahran

State oil giant Saudi Aramco's profit plunged 73% in the second quarter of the year, as a slump in energy demand and prices due to the coronavirus crisis hit sales at the world's biggest oil exporter.

But the company stuck with plans to pay $75 billion in dividends this year and CEO Amin Nasser said global oil demand was recovering.

All major oil companies have taken a hit in the second quarter as lockdowns to contain the coronavirus limited travel, which reduced oil consumption and sent prices tumbling to levels not seen in nearly two decades.

Aramco, which listed in Riyadh last year in a record $29.4 billion flotation, said the rapid spread of COVID-19 globally had significantly reduced demand for crude oil, natural gas and petroleum products.

Nasser told reporters he had seen a partial recovery in the energy market and a pick up in demand as economies gradually open after the easing of coronavirus lockdowns.

"Look at China, their gasoline and diesel demand is almost at pre-COVID 19 levels. We are seeing that Asia is picking up and other markets (too)," he told reporters after announcing the company's quarterly results.

"As countries ease the lockdown, we expect the demand to increase."

Nasser said Aramco was committed to its 2020 dividend.

"We intend to pay the $75 billion, subject to board approval and market conditions," he said.

The group's dividends play a critical role in helping the Saudi government to manage its fiscal deficit.

Aramco reported a 73.4% fall in second-quarter net profit, a steeper drop than analysts had forecast, and said it expected capital expenditure for 2020 to be at the lower end of a $25 billion to $30 billion range.

Net profit fell to 24.6 billion riyals ($6.57 billion) for the quarter to June 30 from 92.6 billion riyals a year earlier.

Analysts had expected net profit of 31.3 billion riyals, according to the mean estimate from three analysts, provided by Refinitiv.

"Aramco figures are healthy compared to other global peers," Mazen al-Sudairi, head of research at Al Rajhi Capital, said. "This was the worst quarter in the modern history of oil industry, and surviving it with healthy figures points to a very positive outlook."

Aramco shares were up about 0.4% in early trade. The group is currently the world's second most valuable publicly traded company after Apple.

Aramco said it will pay a dividend of $18.75 billion for the second quarter of this year, in line with plans for a $75 billion dividend for 2020.

BP earlier this month cut its dividend for the first time in a decade after a record second-quarter loss, while Royal Dutch Shell in April cut its dividend for the first time since World War Two.

Aramco's free cash flow stood at $6.1 billion in the second quarter and $21.1 billion for the first half of 2020, respectively, compared with $20.6 billion and $38.0 billion for the same periods in 2019.

Aramco's gearing ratio was 20.1% at the end of June, mainly reflecting the deferred consideration for the acquisition of Saudi Basic Industries Corp and the consolidation of SABIC's net debt on to Aramco's balance sheet.($1 = 3.7501 riyals)

(Reporting by Saeed Azhar and Rania El Gamal; Additional reporting by Marwa Rashad in Riyadh. Editing by Jane Merriman)

By Saeed Azhar and Rania El Gamal


Stocks mentioned in the article
ChangeLast1st jan.
APPLE INC. 0.24% 115.1399 Delayed Quote.56.70%
LONDON BRENT OIL -1.02% 40.62 Delayed Quote.-37.71%
ROYAL DUTCH SHELL PLC -2.50% 10.59 Delayed Quote.-58.46%
SAUDI ARABIAN OIL COMPANY -2.27% 34.5 End-of-day quote.-2.13%
SAUDI BASIC INDUSTRIES CORPORATION -4.51% 93.2 End-of-day quote.-0.75%
WTI -1.04% 38.71 Delayed Quote.-36.11%
share with twitter share with LinkedIn share with facebook
Latest news "Economy & Forex"
09:55aVALLOUREC : Our intelligent pipes become your eyes inside the well
PU
09:55aIMF Staff Completes Virtual Review Mission to Rwanda
PU
09:55aBANK OF SLOVENIA : More than 24,000 applications for the deferral of loan repayments; EUR 390 million in corporate liquidity loans approved
PU
09:42aWall Street opens lower as virus cases surge, stimulus doubts weigh
RE
09:40a'Time is very short' Britain says as EU's Barnier heads to London
RE
09:39aTSX opens lower on energy weakness as surging virus cases weigh
RE
09:38aTSX opens lower on energy weakness as surging virus cases weigh
RE
09:38aBrexit decision entirely separate from U.S. election outcome says PM Johnson
RE
09:32aGLOBAL MARKETS : Stocks dip on surging virus cases, stimulus doubts
RE
09:27aMunich Leukemia Laboratory put up for sale -sources
RE
Latest news "Economy & Forex"