• Wednesday, June 12, 2024
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Aramco’s Q2 profit tanks 73.4% predicts oil recovery

Aramco’s Q2 profit tanks 73.4% predicts oil recovery

Oil giant, Aramco’s profit plunged 73 percent in the second quarter of the year, on the back of a slump in energy demand and prices as coronavirus crisis hit sales at the world’s biggest oil exporter.

Aramco reported a 73.4percent fall in secondquarter net profit, a steeper drop than analysts had forecast, and said it expected capital expenditure for 2020 to be at the lower end of a $ 25 billion to $ 30 billion range. Net profit fell to 24.6 billion riyals ($6.57 billion) for the quarter to June 30 from 92.6 billion riyals a year earlier.

Aramco’s free cash flow stood at $6.1 billion in the second quarter and $21.1 billion for the first half of 2020, respectively, compared with $20.6 billion and $38.0 billion for the same periods in 2019.

Aramco said it will pay a dividend of $18.75 billion for the second quarter of this year, in line with plans for a $75 billion dividend for 2020.

Amin Nasser, CEO Aramco said the rapid spread of COVID-19 globally had significantly reduced demand for crude oil, natural gas and petroleum products.

Nasser said he sees a partial recovery in the energy market and a pick up in demand as economies gradually open after the easing of coronavirus lockdowns.

Look at China, their gasoline and diesel demand is almost at pre- COVID 19 levels. We are seeing that Asia is picking up and other markets (too),” he told reporters after announcing the company’s quarterly results.

“As countries ease the lockdown, we expect the demand to increase.” he said.

In recent times, major oil companies have taken a hit in the second quarter as lockdowns to contain the coronavirus limited travel, which reduced oil consumption and sent prices tumbling to levels not seen in nearly two decades.