Oil giant Saudi Aramco paid out $75bn in dividends as it reported a sharp fall in annual profits on the back of a slump in demand due to the coronavirus travel bans and restrictions.
The Saudi state oil company said net earnings fell 44% to $49bn (£35bn) in what it called “one of the most challenging years in recent history” as the price of crude plunged by 20% hitting rivals such as Royal Dutch Shell, BP and Exxon Mobil.
Prices have recovered as vaccine rollouts fuel optimism about the economic recovery and a cut in production agreed by major producers.
“We are seeing a pick-up in demand in Asia and also positive signs elsewhere,” said Saudi Aramco’s chief executive, Amin Nasser. “We expect this to continue as governments and authorities around the world reopen economies.”
Free cash flow slid nearly 40% to $49bn, lower than what is required to cover Aramco’s dividend.
Capital expenditure was cut sharply to $27bn from $32.8bn a year earlier and the company said it expected this to be about $35bn for 2021, “significantly lower” than the planned $40bn – $45bn.
Aramco also face other external threats after its facilities were hit by two recent drone attacks on because of Saudi involvement in the war in Yemen; one last Friday started a fire at an oil refinery in Riyadh.
