"Saudi Aramco profit slumps 44% after Covid-battered year, but maintains dividend"

" \n Oil giant Saudi Aramco reported a 44% slump in full-year 2020 results, but maintained its $75 billion dollar dividend payout, with CEO Amin Nasser describing the last twelve months as one of the most \u201cchallenging years\u201d in recent history. \n \n\n \n Saudi Aramco, Saudi Arabia\u2019s behemoth state oil firm, reported net income of $49 billion in 2020, down from $88.19 billion in 2019. The result was slightly below analysts expectations of $48.1 billion but still represents the highest of any public company globally. \n \n\n \n \u201cIn one of the most challenging years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility,\u201d Saudi Aramco Chief Executive Amin Nasser said in company statement Sunday. \n \n\n \n Aramco said revenues were impacted by lower crude oil prices and volumes sold, and weakened refining and chemicals margins. \n \n\n \n The firm also said it expects to cut capital expenditure in the year ahead, and lowered its guidance for spending to around $35 billion from a range of $40 billion to $45 billion previously. \n \n\n \n Free cash flow slumped almost 40% to $49 billion, well below the level of its hotly anticipated dividend. Aramco also declared a payout of $75 billion for 2020, despite concern that it would take on additional debt to maintain it. \n \n\n \n \u201cLooking ahead, our long-term strategy to optimize our oil and gas portfolio is on track and, as the macro environment improves, we are seeing a pick-up in demand in Asia and also positive signs elsewhere,\u201d he added. \n \n\n \n Shares in the top western oil and gas companies including Royal Dutch Shell and BP dropped to multi-year lows in 2020, as the coronavirus pandemic wrecked havoc across the global economy and sparked a historic collapse in the price of oil. Exxon Mobil, the largest U.S. energy company, posted its first annual loss. \n \n\n \n Escalating attacks on oil facilities \n \n\n \n Aramco\u2019s facilities have been the target of several attacks by Yemen\u2019s Houthi rebels \u2014 attacks that have escalated this year, with Saudi Arabia and Iran, the latter of whom backs the rebels, on opposing sides of Yemen\u2019s bloody civil war. \n \n\n \n Houthi missile volleys in parts of Saudi Arabia that struck Aramco facilities earlier in March briefly sent the price of oil above $70 a barrel to its highest level in more than a year. Most recently, the rebels claimed responsibility for\u00a0drone strikes on an Aramco facility in the capital Riyadh on Friday, causing a fire that the Saudi energy ministry said was quickly brought under control with no casualties.\u00a0 \n \n\n \n Asked how the company aimed to reassure investors and the global community that its infrastructure was well-protected and prepared to prevent serious disruption to its operations, CEO Amin Nasser stressed that there was \u201cno impact on business\u201d from the attacks. \n \n\n \n \u201cI think the most important thing is the readiness of our people,\u201d Nasser told CNBC during a press conference following the earnings release. \u201cThere is always something you learn with each attack, and you go and you enhance your emergency response \u2026 and you make sure you have all what is needed to restore these facilities if they are attacked.\u201d \n \n\n \n \u201cWe have learned a lot, we have been able to demonstrate with a reliability of 99.9% that we are capable, under any scenario, to put the facility back onstream and ensure the safety and security of our people and at the same time ensure that the supplies to our customer is met,\u201d Nasser added.\u00a0 \n \n\n \n \u201cThe attack on Riyadh is a good demonstration, within hours of putting out the fires and finishing the investigation, we started putting the facility (back) on,\u201d he said. \u201cToday the Riyadh refinery started to come onstream. So it is a demonstration of the capability and the contingency plan and the emergency response of first responders.\u201d \n \n\n \n Nasser also expressed his optimism for the oil demand outlook in 2021. \n \n\n \n \u201cWe have seen improvement on prices, with pickup on demand, much better recovery. China is also very close to pre-pandemic levels,\u201d the CEO said. \n \n\n \n \u201cWith more deployment of the vaccines we will see more demand pickup so we are very optimistic about 2021 in terms of growth in demand, especially in the second half, and we can see the prices so far responding to what we are seeing in the market, we are looking forward to a much better year in 2021.\u201d \n \n\n \n International benchmark Brent crude\u00a0is at $64.53 a barrel, up about 25% year-to-date and up a whopping 73% from one year ago. \n \n\n \n Several oil analysts have upped their price forecasts for the 2021 on vaccine and demand confidence, with Goldman Sachs predicting a rise to $80 per barrel by the third quarter of this year \u2014 something unimaginable when WTI prices went negative for the first time in history roughly one year ago. \n "

"Saudi Aramco profit slumps 44% after Covid-battered year, but maintains dividend"

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