Business & Economy

Aramco’s income falls by 73 percent in 2nd quarter of 2020

By Suliman al Asad

Riyadh, Aug 9 (efe-epa).- The net income of Saudi state-run oil company Aramco dropped during the second quarter by 73 percent in the wake of a pricing war with Russia and production deceleration caused by the coronavirus pandemic.

The company announced on Sunday that during the second quarter it had registered $6.6 billion in net income, compared to $24.7 billion during the same period of last year.

During the first half of 2020, the oil giant recorded net income of $23.2 billion, 49.5 percent lower than the first six months of last year, the company said in a statement.

The cash flow from operating activities stood at $12.3 billion during the second quarter and at $34.8 billion in the first half of the year, while the free cash flow recorded $6.1 billion and $21.1 billion respectively.

Despite the partial impact, the oil company maintains the quarterly dividend of $18.75 billion that will be paid in the third quarter of the year.

Aramco made its stock market debut at local Tadawul in December exceeding expectations but the following oil crisis took its toll on the share.

The operations-equity ratio was 20.1 percent at the end of June, a leverage rate that the company attributes to the recent purchase of a large part of the petrochemical company SABIC and the consolidation of its net debt on Aramco’s balance sheet.

Finally, the capital expenses registered $6.2 billion during the second quarter of 2020 and $13.6 billion during the first half of the year.

Oil prices fell to their lowest in a decade due to the coronavirus, while a pricing war between Saudi Arabia and Russia that broke out in March has worsened the situation.

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