According to the latest data, Saudi Arabia’s oil behemoth Saudi Aramco lost about 73% of its income. The slump was caused by nosediving oil demand and prices amid the coronavirus pandemic. However, the company’s representatives are almost sure that they will be able to pay dividends worth $75 billion. Despite the fact that the oil market situation is really preposterous, the company decided to fulfill its obligations in order to avoid higher tension. Moreover, analysts suppose that the oil market is getting back on track.
Nearly all of the dividend money will go to the Saudi government as it needs support amid growing fiscal deficit.
At the same time, the company has also faced difficulties. Thus, its quarterly earnings plunged by 73.4%. Analysts had predicted a smaller decline. At the moment, Saudi Aramco’s net profit amounts to 24.6 billion riyals that is $6.57 billion compared to 92.6 billion riyals a year earlier.
Analysts had expected a net profit not lower than 31.3 billion riyals in the second quarter. At the same time, the company’s shares added 0.4%.
The Dhahran-based firm’s free cash flow also slumped. Thus, in the second quarter, the free cash flow was $6.1 billion compared to $20.6 billion. At the same time, data for the first half of the year showed that the free cash flow totaled $21.1 billion compared to $38.0 billion in the same period in 2019. Aramco expects capital expenditure to vary from $25 billion to $30 billion in 2020.
The company’s management hopes that the oil market on the Asian territory will partially recover boosting oil demand and prices. Thus, the company will have chances to spread its wings again.
