Sunday 9 August 2020 9:32 am

Saudi Aramco profit plunges 73.4 per cent as oil market stumbles

Saudi state oil group Aramco today reported a 73.4 per cent fall in second-quarter net profit, a steeper drop than analysts had forecast.

It also said it expected capital expenditure for 2020 to be at the lower end of a $25bn to $30bn range.

The world’s biggest oil exporter said the rapid spread of Covid-19 globally had significantly reduced demand for crude oil, natural gas and petroleum products.

Read more: Global oil prices hit five-month high despite demand fears

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies,” chief executive Amin Nasser said in a statement.

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

Analysts had expected a net profit of 31.3bn riyals in the second quarter, according to the mean estimate from three analysts, provided by Refinitiv.

Aramco is currently the world’s second most valuable publicly traded company after Apple which overtook the oil group to take the number one slot in terms of market value earlier this month.

All major oil companies have taken a hit in the second quarter as lockdowns to contain the coronavirus limited travel, which hurt oil demand and sent oil prices tumbling to levels not seen in nearly two decades.

Read more: BP ready to offload gas and oil assets even if crude prices bounce back

Brent crude prices at the end of the second quarter were down 38 per cent from a year earlier, despite an agreement by Opec+ producers to cut oil supply by a record 9.7m barrel per day from May to help to shore up prices and curb oversupply.

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

BP earlier this month cut its dividend for the first time in a decade after a record $6.7bn second-quarter loss, while Royal Dutch Shell in April cut its dividend for the first time since the Second World War.