Aramco profit plunges 73% in the second quarter

Riyadh, Aug 9 (EFE) .- The net profit of the Saudi state oil company Aramco sank in the second quarter of the year by 73%, reaching 6,600 million dollars, due to the effects of the precious crisis between Saudis and Russians and the slowdown in global production due to COVID-19.

The quarterly profit contrasts with the same period of the previous year, when it obtained about 24,700 million dollars and some credit agencies ranked it as the company with the highest profits in the world.

In the first half of 2020, the oil giant achieved a net profit of 23.2 billion dollars, 49.5% less than the 46.9 billion it had in the first six months of 2019, the company reported this Sunday in a statement.

Cash flow from operating activities was $ 12.3 billion in the second quarter and $ 34.8 billion in the first six months of the year, while free cash flow was $ 6.1 billion and $ 21.1 billion. million, respectively.

Despite the partial impact, the oil company maintains the quarterly dividend of 18,750 million dollars that it will pay in the third tranche of the year.

Aramco went public in Riyadh (Tadawul) for the first time last December and in the previous weeks had sold 3,000 million shares or 1.5% of its stake, a debut that exceeded expectations but that with the subsequent crisis of the Oil led it to fluctuate down as well.

The operations-equity ratio was 20.1% at the end of June, a leverage rate that the company attributes to the recent purchase of a large part of the petrochemical company SABIC and the consolidation of its net debt on Aramco’s balance sheet.

Finally, capital expenditures stood at $ 6.2 billion in the second quarter of 2020 and at $ 13.6 billion for the entire semester, with expectations that these will remain between $ 25 and $ 30 billion this year.

The cost of a barrel fell to lows not seen in decades as demand for crude fell during the coronavirus pandemic, exacerbated by the price war unleashed in March between Russia and Saudi Arabia, which sent the revenues of the country’s largest oil company plummeting. world.

Finally, at the end of April, the OPEC + countries (an alliance of the Organization of Petroleum Exporting Countries and ten non-member states) reached an agreement to cut 9.7 million barrels per day (mbd).

Added to this was the announcement in mid-May of an additional “voluntary” reduction of one million barrels from June in Aramco’s production, the last piece of a puzzle that has been recognized in part by Aramco’s own president, Amin. Nasser.

“The strong headwinds due to falling demand and low oil prices are reflected in our second quarter results,” said the CEO of the oil company, according to the note.

However, Nasser promised to stick to the goals of his long-term growth and diversification strategy for the oil company, which continues to bet heavily on gas.

In this regard, the company highlighted that in the second quarter the Fadhili gas plant reached its maximum production capacity, about 2,500 million cubic feet per day, in addition to the acquisition of 70% of SABIC for 69,100 million dollars.

“We are seeing a partial recovery in energy markets as the countries of the world take steps to lift restrictions and restart markets,” concluded the president and CEO.

(c) EFE Agency