Saudi Aramco reports a close to 50% decline in full-year profit

Saudi Aramco (SE: 2222) said late on Sunday that its profit in 2020 posted a steep decline of close to 50% due to the ongoing Coronavirus pandemic that wreaked havoc on the global energy markets. The COVID-19 crisis has so far infected more than 120 million people worldwide and caused over 2.7 million deaths.

Saudi Aramco is currently trading at £6.79 per share in the stock market. In comparison, it had a per-share price of £6.70 at the start of 2021. Aramco touched a year-to-date high of £6.90 per share earlier this month, and a low of £6.53 per share in the first week of February.

Aramco to pay £13.52 billion in quarterly dividend

Saudi Aramco reported £35.34 billion of profit in 2020 versus the year-ago figure of £63.62 billion, and £80.14 billion of profit in 2018. Despite a sharp decline in its profit over recent years, Aramco is still one of the most valuable companies in the world.

A 44% year over year decline in net income, however, failed to sabotage the oil giant’s commitment to its shareholders. Aramco reaffirmed that it’ll pay £54.10 billion in dividends this year, or £13.52 billion per quarter. In an earlier report published in the first week of November, the energy company had posted a 44.6% decline in net profit in the third quarter.

Chief Executive Amin H. Nasser commented on the financial update on Sunday and said:

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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. As a result, our financial position remained robust.”

Aramco forecasts £25.25 billion of capital expenditures this year

The annual report on Sunday further highlighted that Aramco’s crude oil production in 2020 stood at 9.2 million barrels per day. Compared to £23.66 billion in 2019, capital expenditure in the recently concluded year slid to £19.48 billion.

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The Dhahran-based firm now forecasts £25.25 billion of expenditure this year. In its previous guidance, it had expected up to a much higher £32.46 billion of annual capital expenditure. Last month, Aramco said it had received multiple bids for a £7.21 billion pipeline stake.

Aramco performed only slightly upbeat in the stock market last year with an annual gain of a little under 10%. At the time of writing, it is valued at £1.36 trillion and has a price to earnings ratio of 34.01.

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