Loading...

Saturday, October 16, 2021

Aramco Group’s net profit is down 44 percent due to lower oil prices

With the decline in crude oil prices and the decline in global demand due to the Corona epidemic, the net profits of Saudi Aramco Group in 2020 decreased by 44.4% compared to 2019, reaching 41 billion euros.

The net profit achieved by Aramco reached 41 billion euros in the year 2020, which represents a 44.4% decrease from the year 2019, due to the decline in crude oil prices with the decline in global demand due to the Covid-19 epidemic. Aramco has revealed a successive decline in profits since it began announcing its performance results in 2019.

The Saudi group indicated in a statement that it “achieved a net income of 184 billion Saudi riyals (49 billion dollars, 41 billion euros) in 2020,” compared to 88.2 billion dollars (73.8 billion euros) in the previous year. And the group considered that it went through “one of the most difficult and challenging years of this era.”

It pointed out that “the revenues of the sector were affected by a sharp decline in crude oil prices, a decline in its sales, and low-profit margins in the refining and chemical business.”

But compared to other companies in the sector, which also recorded large losses, the group, which floated its shares on the stock exchange in 2019, said that it “demonstrated its strong financial resilience in the most difficult period in the energy sector.”

This situation has put pressure on public finances as Riyadh seeks ambitious billions of dollars in projects to diversify the oil-dependent economy. Saudi Arabia, the world’s largest crude oil exporter, was hit last year by sharp price cuts and sharp production cuts.

In recent weeks, the price of crude oil rose to more than sixty dollars a barrel. However, analysts indicate that the Saudi giant is preparing for a possible new wave of the spread of the Coronavirus that may jeopardize the timid global economic recovery and a further decline in global demand for crude oil.

With the increase in the pace of pollination campaigns globally, the giant Saudi group said it was looking forward to a rise in oil demand, especially in Asia and other parts of the world.

Analysts say that the company’s debt levels rose last year as it provided generous dividends to its shareholders despite the decline in its profits.

The company confirmed that it had fulfilled its obligation to pay dividends of $ 75 billion to shareholders in 2020, an amount that basically exceeds the declared profits.

 

It should be noted that Bloomberg reported in June that Aramco had cut hundreds of jobs in an attempt to reduce costs. Aramco was listed on the Saudi stock exchange in December after the world’s largest initial public offering (IPO), valued at $ 29.4 billion, against the sale of 1.7 percent of its shares.

Translate »
%d bloggers like this: