DUBAI – Saudi Aramco's net income plunged by 50% in the first half of the year, according to figures published Sunday, offering a revealing glimpse into the impact of the coronavirus pandemic on one of the world's biggest oil producers.
Profits for the first six months of the year plunged to $23.2 billion, half of last year’s $46.9 billion for the same time period.
The results were announced as Aramco's second quarter earnings dipped to $6.6 billion compared to $24.7 billion during the same time last year, reflecting a staggering 73% drop.
The majority state-owned company's financial health is crucial to Saudi Arabia's stability. Despite massive efforts by Saudi Crown Prince Mohammed bin Salman to diversify the economy, Saudi Arabia still depends heavily on oil exports to fuel government spending.
The price of Brent crude hovers just under $45 a barrel, significantly less than before the pandemic but up from a low of around $21 a barrel in April.
Aramco CEO Amin Nasser acknowledged the company's finances were impacted by “strong headwinds from reduced demand and lower oil prices" sparked by the pandemic, which halted flights around the world and plunged economies into recession, including Saudi Arabia's.
The company said it will uphold its commitment to pay out dividends of $18.75 billion for the second quarter as part of its promise to pay $75 billion in annual dividends.
Nasser described Aramco's half-year earnings as “solid” and credited the company's low production costs and operational strength, which helped it to maintain its promised dividend payments.