State-owned Saudi Aramco on Tuesday reported a net profit of SAR44.21 billion ($11.79 billion) for the third quarter of 2020, a 44.6% drop from SAR79.84 billion a year earlier. The company attributed the decline to the looming fallout of the coronavirus pandemic, which continued to hurt oil demand and prices. Aramco’s shares gained 1% to 34.4 riyals by 0830 GMT on Tuesday. However, it has been down 2.3% since the start of the year. This is much better than the likes of Exxon, BP, Shell, and Chevron, which have lost 40%-50% of their market values this year.
Despite the year-on-year decline, Aramco’s net profit nearly doubled from SAR24.62 billion in the second quarter. Aramco attributed the quarterly gain to the higher oil prices in the July-September period. According to CEO Amin Nasser, improved economic activity in the third quarter was reflected in early signs of a recovery in the oil market.
Aramco’s free cash flow stood at $12.4 billion in the July-September quarter, rising from $6.1 billion in the previous three-month period. The company said it would pay an $18.75-billion dividend for the third quarter, in line with its promise to distribute a $7-billion dividend this year. However, analysts at EFG-Hermes said Aramco needed oil prices of at least $55/barrel to deliver the promised dividend. Otherwise, the company will need to reduce capex further and increase debt in short- to medium-term.
Tags: AlwaysFree,Crude Oil,English,Gas,Middle East,Saudi Arabia
Published on November 4, 2020 10:45 AM (GMT+8)Last Updated on November 4, 2020 10:45 AM (GMT+8)
