Saudi Aramco 2020 profits slump on lower crude prices

RIYADH: Energy giant Saudi Aramco on Sunday posted a 44.4 percent slump in 2020 net profit due to lower crude prices, as the coronavirus pandemic weighed heavily on global demand.

Aramco, Saudi Arabia's cash cow, has revealed consecutive falls in profits since it began disclosing earnings in 2019.

That has piled pressure on government finances as Riyadh pursues multi-billion dollar projects to diversify the oil-reliant economy.

"Aramco achieved a net income of $49 billion in 2020," the company said in a statement -- down from $88.2 billion in 2019.

Saudi Arabia, the world's biggest crude exporter, was hammered last year by the double whammy of low prices and sharp cuts in production.

Aramco chief executive Amin Nasser described it as "one of the most challenging years in recent history".

The firm said "revenues were impacted by lower crude oil prices and volumes sold, and weakened refining and chemicals margins."

But compared to many of its loss-generating international peers, the company, which made its stock market debut in 2019, played up its "strong financial resilience" despite the challenges.

Crude prices have risen in recent weeks to over $60 per barrel.

But in the short term, analysts say the Saudi giant is bracing for a possible further waves of coronavirus infections that could undermine a tentative global economic recovery.

As the global vaccination program gains momentum, however, Aramco said it was seeing a pick-up in crude demand in energy-hungry Asia and other parts of the world.

Analysts say the company's debt levels surged last year as it offered shareholders a bumper dividend even as its earnings plunged.

Aramco said it stuck to its commitment of paying shareholders dividends worth $75 billion in 2020 -- an amount that exceeds the declared profit.

Dividend payments from Aramco help the Saudi government, the company's biggest shareholder, manage its ballooning budget deficit.