On May 12, 2020, ARAMCO the Saudi state’s own giant company reported a 25 percent fall in first-quarter net profit, below analyst estimates, after it was hurt by a plunge in crude oil prices as the coronavirus slashed demand.

Brent crude prices fell 65 % in the first quarter before the world’s top oil producers, including Saudi Arabia and Russia, agreed to cut oil supply by a record 9.7 million barrels per day starting from May 2020.

ARAMCO, the world’s most valuable company, will pay a dividend of $18.75 billion for the first three months of 2020. The company didn’t specify if it was still committed to the full-year goal of $75 billion.

Analysts had expected a profit of $17.8bn, according to the mean estimate from Egyptian investment bank EFG-Hermes, Saudi Arabia’s Al Rajhi Capital, and Dubai-based Arqaam Capital.

ARAMCO stated that the results reflected “lower crude oil prices, as well as declining refining and chemical margins” among other financial pressures.

The companies’ cash flows from operating activities, stood at $22.4bn in the first quarter, compared with $24.5bn in the same period of 2019. The company plans are to acquire a stake in Saudi petrochemical maker SABIC for about $70bn, but the deal was likely to be restructured with the slump in oil prices due to the coronavirus. Aramco said earlier on Tuesday its planned acquisition of a 70 percent equity stake in SABIC is on track to close in the second quarter.

Amin NASSER the CEO of ARAMCO said: “We retain significant flexibility to adjust expenditures and have considerable experience in managing the business through times of adversity”. “This resilience will enable us to continue delivering on our commitments to our shareholders”.

“Looking ahead to the remainder of 2020, we expect the impact of the Covid-19 pandemic on global energy demand and oil prices to weigh on our earnings” Nasser said. “We continue to reinforce the business during this period by reducing our capex and driving operational excellence. Longer-term we remain confident that demand for energy will rebound as global economies recover”.

This article was edited using the data from the Aljazeera.com, Bloombergquint.com, and, Ednews.net.

Source of the photo: ednews.net.