Aramco Profits Fall 25% in the First Quarter

Saudi oil giant Aramco announced a 25% drop in first quarter net profit on Tuesday due to falling oil prices, saying the coronavirus crisis will dampen demand and profits year-round.

Aramco posted net profit of 62.5 billion riyals ($ 16.66 billion) in the first three months of 2020, up from $ 22.2 billion in the first quarter of last year, the most said. large company listed on the stock market in the world.

“The Covid-19 crisis is unlike anything the world has experienced in recent history and we are adapting to a very complex and rapidly changing business environment,” Aramco CEO, Amin Nasser Said in a statement.

According to the company, the drop in profits mainly reflects the sharp drop in crude oil prices, as well as the decline in refining and chemical margins.

“For the rest of 2020, we expect the impact of the Covid-19 pandemic on global energy demand and oil prices to weigh on our revenues,” added Amin Nasser.

The slowdown in economic activity due to the coronavirus pandemic has caused a cataclysm in the world oil market, also struck by a price war between Saudi Arabia and Russia, the world’s third and second largest producers respectively.

As a result, the price of oil plummeted in March to its lowest level in nearly two decades, losing almost two-thirds of its value.

“In the longer term, we remain confident that the demand for energy will rebound as the world economies recover”, wanted to reassure Nasser, adding however that the company plans to continue its spending cuts investment.

It is not the first time that Aramco has suffered the blow in the face of falling crude oil prices on world markets. The behemoth recorded a 20.6% drop in net profit in 2019 to $ 88.2 billion. In 2018, the company posted net earnings of $ 111.1 billion.

The world’s largest exporter of crude oil, Saudi Arabia announced on Monday an austerity plan providing for a tripling of value added tax and the end of monthly allowances to its citizens, in response to the fall in oil prices and the Covid-19 pandemic.

The same day, the Ministry of Energy said it had asked Aramco to reduce its production by a million barrels per day from June, in order to support oil prices.

Here is the statement:

2020
The Saudi Arabian company uniform
Initial report for the first trimester
For the period ended March 31, 2020
Saudi Aramco’s first report for the first quarter of 2020
The most important financial information
net income
(Billion)
SAR 5.62
$ 7.16
Profit before interest and taxes *
(Billion)
SAR 3.128
2.34 USD
Share price
(Basic and reduced)
32.0 Saudi riyals
08.0 USD
Net cash generated from operating activities
(Billion)
SAR 1.84
$ 4.22
Capital expenditures
(Billion)
SAR 7.27
$ 4.7
Free cash flows *
(Billion)
SAR 3.56
0.15 USD
Average realized price of crude oil
(USD / Barrel)
51.8
Indebtedness ratio *
% ()
4.9-
Dividends paid
(Billion)
SAR 2.50
$ 4.13
Dividends paid per share
25.0 Saudi riyals
07.0 USD
Return on average invested capital *
(%)
26.3
Operational highlights
Crude oil production
(Million barrels a day)
9.8
1 Reliability
% ()
99.7
Total refined energy
(Million barrels a day)
6.4
∗ Scale not included in IFRS: For more details, please refer to Metrics and Tariff metrics not included in the requirements of IFRS.
1.The Saudi Arabian (Arabian) wear company only.
About Saudi Aramco’s results
First Quarter 2020
Saudi Aramco’s first report for the first quarter of 2020 3

Amin bin Hassan Al-NasserSaudi Aramco’s Chairman and Chief Executive Officer:

It is unlikely that our financial performance will be affected during the first three months of 2020 due to the consequences of an outbreak
The novelty of the new Covid-19, which continues to cloud all over the world.
Crude oil prices fell. Despite these challenges, Saudi Aramco has achieved exceptional financial results
In the first quarter of this year, the company preferred to manage its financial position and its low business structure.
the cost. Where the net income was SAR 5.62 billion ($ 7.16 billion), and the return on
Invested capital 3.26% and free cash flows 3.56 billion Saudi riyals ($ 0.15 billion
Aramco), and the debt ratio is -9.4%. Saudi Aramco announced the distribution of 32.70 billion worth of profits.
Saudi Riyals ($ 75.18 billion) for the first quarter of 2020, and these results show flexibility
Saudi Aramco’s strength is evident across various economic cycles.
During the first quarter, Saudi Aramco improved its capital spending plan for 2020 with work.
At the same time, it identifies opportunities that help it enhance operational productivity levels. It is now
Saudi Aramco has shown its great flexibility

Upward, to make further improvements to its spending structure, it will not be duplicated
To address the effects and consequences of the emerging  virus on economic activity and energy demand.
Whereas the entire world has not witnessed a crisis comparable to the pandemic of the new Covid 19, we must
All are changing quickly. The company is still positioning its employees to adapt to these highly complex developments
At the top of its agenda, the work done by the company’s employees – along with its buyers and contractors – is an example.
The backbone that is indispensable to the company in carrying out its basic activities and performing its mission of supplying the world with energy
Needed according to reliability and safety standards. Saudi Aramco is helping communities up
Fighting the outbreak of the new Covid-19), by providing support to welfare organizations
Health and Relief, either. In the Kingdom or in international locations
In addition to the urgent efforts made by the company to reduce.
The situation and mitigating the situation on the current economy, has remained very focused on achieving growth and
Position
The long-term value is that these unfavorable conditions will overload opportunities.
Remote, safe
Despite the unprecedented mystery and blurry image created by the pandemic virus,
Al-Mostajad (Cofid-19), Saudi Aramco has high levels of significant experience that enable it to overcome
Adversity and access to land will enable us to continue to fulfill our commitment to safety times.

Despite the economic downturns and commodity price fluctuations globally, they did
Saudi Aramco has strong profits and cash inflows, coupled with reliability and operational performance. a
In order to face the ongoing outbreak of the new European virus epidemic (Kovid-19), Aramco implemented
Saudi Arabia operates effective preventive programs and contingency plans in its business locations to reduce risks related to this
In the midst of these challenges, the company has taken a series of measures to ensure
Continuity of work and maintaining the safety of its employees, such as activating the policy of work from home and imposing
Strict sterilization measures in all areas of its horizon and installations. The company will spare no measures
effort.

Additional if necessary and deemed the feasibility of its application.
Moreover, Saudi Aramco implemented additional measures to improve spending, resulting in a reduction in
Expected capital expenditures for 2020. In light of market conditions and recent fluctuations in prices
Commodities, Saudi Aramco still expects that its capital expenditures will be less than the fiscal year
2020 Between SAR 75.93 billion ($ 25 billion) to $ 50.112 billion
Saudi Arabia ($ 30 billion) compared to $ 88.122 billion ($ 8.32 billion)
American) for the fiscal year 2019.
Prospecting and production sector
In light of the difficult conditions in the market, the exploration and production sector has maintained its leading position
In the field of oil and gas production.

The most important developments in the prospecting and production sector in the first quarter of 2020:
• Saudi Aramco has resumed operations in the Al Khafji joint operations, through the purchase of Aramco
Fully completed and financed Gulf Business Limited. Aramco is doing business..
Gulf Limited A has its employees in the divided coastal area located between the Kingdom of Saudi Arabia
Saudi Arabia and the State of Kuwait, with a 50% ownership interest in Al-Khafji’s purchases.

• In exploration work, two new fields were successfully discovered during the first quarter of the year
2020; one field containing oil and gas reservoirs discovered in the northwestern part of the country
Kingdom and the discovery of one oil field in the Central Business District.

• The company increased the treatment capacity of the gas plant in Al-Fadhili from 5.1 billion standard cubic feet
Today, the end of the year, in 2019 to 0.2 billion standard cubic feet per day during
The first quarter of 2020, work was done in the factory on the right track, and it is expected
To reach its full capacity at the level of 5.2 billion standard cubic feet during the public day.
• During January 2020, mechanical work on the new facility ended for extraction
Ethane is very cold in the Othmaniyah gas plant. The facility undertook treatment work on
At present, it is approximately 4.1 billion feet at 70% of the treatment capacity designed for it
Standard cubic day. The facility will reach its full operating capacity upon receipt of additional beds
Of the values ​​from the Haradh Gas Production Project, which is expected to be completed in
2021
• Gas plant activities achieved a cumulative total of 57 million man-hours without any damage
Waste of time and won numerous safety awards from the Gas Therapy Association
For the year 2019.

Repetition, treatment and shopping sector
Despite the significant challenges posed by market conditions, the iteration, processing and shopping sector continued
Keeping up with its long-term strategy to achieve value across the hydro value chain through
It enhances its strategic integration and diversification.
Saudi Aramco continues to operate one of the largest repeat sectors in the world, with a total capacity of
One
It reached 4.6 million barrels per day (as of March 31, 2020) (March 31, 2019): 9.4 million.
A barrel a day). The frequency, processing and shopping sector was consumed in the first quarter of 2020
5.35% (First Quarter of 2019: 9.36%) of Saudi Aramco’s oil production
Raw.

The most prominent developments in the iteration, processing and shopping sector in the first quarter of 2020:
• Aramco Trading Company has signed an agreement to purchase the share of Aramco’s business production
Limited crude oil, after the resumption of Al Khafji operations.
With the regulations issued by the World War Organization in 2020, it succeeded.

• In line
Saudi Aramco starts selling low sulfur fuel oil to ship customers
From the Red Sea and the Arab Gulf regions. Local residents of
The most prominent events of the first century…

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Aramco Profits Fall 25% in the First Quarter - /10

Summary

Saudi oil giant Aramco announced a 25% drop in first quarter net profit on Tuesday due to falling oil prices, saying the coronavirus crisis will dampen demand and profits year-round.

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