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

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in his free… read more.
on Mar 22, 2021
  • Saudi Aramco reports a close to 50% decline in full-year profit.
  • The oil giant to pay £13.52 billion in quarterly dividend.
  • Aramco forecasts £25.25 billion of capital expenditures this year.

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

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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:

“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.

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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