Saudi Arabia’s state owned Aramco has on Tuesday posted 25% fall in profit for the first quarter of 2020 owing to the fallout of low oil prices.
The company said in its report titled, “Saudi Arabian Oil Company first quarter interim report,” which was obtained by THE WHISTLER, that its net income dropped to 62.5 billion riyals ($16.6 billion) from 83.3 billion riyals ($22.2billion) in the same period of 2019.
“Not surprisingly, our financial performance in the first three months of 2020 was impacted by the ongoing effects of the COVID-19 global pandemic as well as lower oil prices. However, with net income of $16.7 billion, ROACE of 26.3%, free cash flow of $15.0 billion and a gearing ratio of -4.9%, our first quarter results were exceptionally strong due to our prudent balance sheet management and low-cost structure,” the Saudi Aramco President & CEO, Amin H. Nasser, said.
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Despite the fallout, Aramco disclosed it would pay a dividend of $18.75 billion in the first quarter.
Aramco had promised to issue a $75 billion dividend annually for five years which was an agreement reached before it became the world’s largest listed company in December 2019, with a market capitalisation of $1.9 trillion.
“Furthermore, Saudi Aramco implemented additional measures to optimize spending which resulted in reducing expected 2020 capital expenditures. In light of market conditions and recent commodity price volatility, Saudi Aramco continues to expect capital expenditures for the fiscal year 2020 to be between $25 billion to $30 billion (2019: $32.8 billion). The company said free cash flow in the first quarter was 56.3 billion riyals, down from 65.1 billion riyals over the same period last year,” the report added.
According the report, free cash flow in the first quarter of 2020 was 56.3 billion riyals, a fall from 65.1 billion riyals realised in same quarter of 2019