On August 8th, 2020  the Saudi state oil group reported a 73.4 % fall in second-quarter net profit, a steeper drop than analysts had forecast. They said that it expected capital expenditure for 2020 to be at the lower end of a $25 billion to $30 billion range.

The dividends of the group have a critical role in helping the Saudi government to manage its fiscal deficit.

Over 98% of the company is owned by the Saudi government and is the main source of revenues to the Saudi Arabian government. The company engages in the exploration, production, transportation, and sale of crude oil, natural gas, and chemicals. The company is focused on innovation, it had 230 patents granted by the U.S. Patent and Trademark Office in 2017.

Aramco shares were up about 0.4 % in early trade. The group is currently the world’s second most valuable publicly traded company after Apple.

The spread of COVID-19 globally had significantly reduced demand for crude oil, natural gas, and petroleum products.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies,” the CEO Amin NASSER said in a statement (Amin H. NASSER has been President and Chief Executive Officer of Saudi Aramco since 2015. He has served in a number of leadership positions, including as Senior Vice President for Upstream).

Net profit fell to 24.6 billion riyals ($6.57 billion) for the quarter to June 30 from 92.6 billion riyals a year earlier.

Aramco said it would distribute a dividend of $18.75 billion for the second quarter of this year, in line with its plan to pay a base dividend of $75 billion for 2020.

“Aramco figures are healthy compared to other global peers” Mazen al-SUDAIRI, head of research at Al Rajhi Capital, said. “This was the worst quarter in the modern history of the oil industry, and surviving it with healthy figures points to a very positive outlook”.

Aramco’s free cash flow stood at $6.1bn in the second quarter and $21.1bn for the first half of 2020, respectively, compared with $20.6bn and $38bn for the same periods in 2019.

This article was edited using the data from the Businesstoday.in, Economictimes.indiatimes.com, Saudiaramco.com, and Aljazeera.com.