Saudi Aramco on Sunday reported a 20.6 per cent drop in its net profit for 2019 due to low oil prices and production levels, the company said in a statement.
These are the first annual results to be announced by the energy giant after its historical $29.4 billion initial public offering and listing on the Saudi Tadawul market last December.
Aramco posted net profits of $88.2 billion last year compared to $111.1 billion in 2018, Monday’s statement said.
“The decrease was primarily due to lower crude oil prices and production volumes, coupled with declining refining and chemical margins,” it said.
The company also made $1.6 billion of impairment provisions for losses associated with Sadara Chemical Company, an Aramco subsidiary.
“2019 was an exceptional year for Saudi Aramco. Through a variety of circumstances — some planned and some not — the world was offered unprecedented insight into Saudi Aramco’s agility and resilience,” CEO Amin Nasser said.
“Our unique scale, low costs, and resilience came together to deliver both growth and world-leading returns, while also maintaining our position as one of the world’s most reliable energy companies,” Nasser said.
The earnings for last year are not affected by the coronavirus outbreak or the ongoing price war between Saudi Arabia and Russia that has sent oil prices crashing.
Aramco said it will distribute dividends worth $73.2 billion for 2019 but based on its commitments under the IPO, its dividends for the next five years starting this year will be at least $75 billion.
It said its capital spending last year dropped to $32.8 billion from $35.1 billion in 2018.
The company expects capital spending, which is expenditure on projects, to be between $25 billion and $30 billion this year “in light of current market conditions and recent commodity price volatility.”
But it said that capital expenditure for 2021 and beyond is currently under review. The results were announced amid a price war between Saudi Arabia and Russia after they failed to agree on additional output cuts to support prices dented by the outbreak of the coronavirus pandemic.
