Tadawul-listed oil and gas giant Saudi Arabian Oil Company (Saudi Aramco) has revealed a 25% year-on-year drop in net profit to $16.66bn (SAR62.48bn) after zakat and tax in Q1 2020, compared to $22.21bn (SAR83.29bn) in the same period last year.
In a stock market filing, the world’s leading oil exporting firm stated that its earnings primarily reflected lower crude oil prices; declining refining and chemicals margins; and inventory re-measurement losses.
Saudi Aramco’s results were partially offset by a decrease in production royalties, mainly resulting from lower crude prices, and a decrease in crude royalty rates from 20% to 15%, in addition to higher revenue relating to the price equalisation income on gas products.
Despite a drop in net profits, the firm has stated that it will maintain its quarterly dividend in line with its vision to ensure a $75bn payout in 2020.
The oil giant has declared cash dividends of $18.75bn (SAR 70.32bn) to shareholders for the first three months of the year, calling it “the highest dividends among all listed companies in the world.”
Construction Week reported earlier this week that the Saudi Ministry of Energy has directed Aramco to reduce its crude oil production, for the upcoming month of June, by an extra voluntary amount of one million barrels per day, in addition to the reduction committed by the Kingdom in the latest OPEC+ agreement on 12 April, 2020.
This brings the total production cut that will be carried out by the Kingdom, to approximately 4.8 million barrels per day, from the April production level.
The kingdom’s production for June, after both its targeted and voluntary cuts, will be 7.492 million barrels per day.
The Saudi Ministry has also directed Aramco to reduce its production in the current month of May, from the target level of 8.492 million barrels per day, in consent with its customers.
Through the additional production cuts, the kingdom aims to encourage OPEC+ participants, as well as other producing countries, to comply with the production cuts they have committed to, and to provide additional voluntary cuts, in an effort to support the stability of global oil markets.