Energy giant Saudi Aramco on Tuesday posted a 44.6 per cent slump in third-quarter profit, as the coronavirus pandemic weighs heavily on demand for crude oil.
“Net income for the third quarter of 2020 was 44.21 billion Saudi riyals ($11.79 billion),” the company said in a statement, compared to $21.3 billion in the same period last year.
Aramco’s net profit for the first nine months of this year also dropped 48.6 per cent to $35.02 billion, the company added.
The results underscore a downbeat oil market as pandemic-driven economic shutdowns crush global demand for crude.
The results are in line with analysts’ expectations but stand in contrast to the losses reported by Aramco’s rivals, which are reeling from a drop in oil demand since the start of the novel coronavirus pandemic.
Aramco’s July-September results showed an improvement compared to the second quarter when it posted a profit of $6.57 billion.
“We saw early signs of a recovery in the third quarter due to improved economic activity, despite the headwinds facing global energy markets,” Aramco’s chief executive Amin Nasser said in the statement.
“We continue to adopt a disciplined and flexible approach to capital allocation in the face of market volatility. We are confident in Aramco’s ability to manage through these challenging times and deliver on our objectives.”
Nasser said Aramco was committed to delivering a dividend of $18.75 billion to shareholders for the third quarter — an amount that exceeds the declared profit.
Aramco was listed on the Saudi bourse in December following the world’s biggest IPO, generating $29.4 billion for 1.7 percent of its shares.
The energy giant is bracing for a possible further wave of coronavirus infections that could undermine a tentative global economic recovery and erode the demand for crude worldwide, analysts say.
Saudi Arabia, the world’s biggest crude oil exporter, has been hit hard by the double whammy of low prices and sharp cuts in production.
A sharp drop in oil income is expected to hinder Crown Prince Mohammed bin Salman’s ambitious plans to overhaul the kingdom’s energy-reliant economy.