Due to COVID-19 and Oil Price Crash... Saudi Aramco's Q2 Net Profit Drops 73%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Saudi Arabia's state-owned oil company Aramco announced on the 9th (local time) that its net profit for the second quarter (April to June) of this year plummeted by 73% compared to the same period last year due to the COVID-19 pandemic and the international oil price crash.

According to Bloomberg News, Aramco's net profit for the second quarter was recorded at 24.6 billion riyals (approximately 7.8 trillion won), showing a 73.4% decrease compared to the same period last year. This is less than half of the net profit in the first quarter.

Aramco explained, "Net profit declined due to reduced demand caused by the COVID-19 pandemic, falling oil prices, and decreased refining and petrochemical margins," adding, "As countries ease lockdowns and restart economic activities, the energy market is partially recovering."

However, despite the decrease in net profit, Aramco announced that its dividend for the second quarter is $18.75 billion and stated that it will proceed with the full-year dividend plan of $75 billion as planned. Since the Saudi government holds 98% of Aramco's shares, most of the dividends are expected to go to the Saudi government. In June, Aramco had mentioned that it might issue additional bonds or take out loans to fulfill the dividend plan.

Aramco was listed on the Saudi Riyadh Tadawul stock exchange in December last year, becoming the company with the highest market capitalization in the world. However, due to the recent impact of COVID-19 causing its stock price to fall, it lost the world's number one market cap position to Apple earlier this month.