Riyadh, Saudi Arabia”•Energy giant Saudi Aramco said on Sunday its second-quarter profits plunged a massive 73 percent due to sharply lower oil prices as the coronavirus crisis undercuts global demand.
The behemoth, recently dethroned by Apple as the world’s most valuable listed company, posted a net profit of $6.6 billion for the three months to June 30 compared to $24.7 billion for the same period of 2019.
The results are in line with analysts’ expectations but stand in contrast to the losses reported by its rival energy giants, which are reeling from a drop in oil demand since the start of the novel coronavirus pandemic.
“Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results,” Aramco’s chief executive Amin Nasser said in a statement.
“Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce and unrivaled financial and operational strength.”
Aramco’s net profit for the first half of the year also slumped by 50.5 percent to $23.2 billion, compared to $46.9 billion in the same period last year.
The results underscore a downbeat oil market as pandemic-driven economic shutdowns crush the global demand for crude.
Five other leading oil firms”•BP, Chevron, ExxonMobil, Royal Dutch Shell and Total”•recently reported combined losses of $53 billion for the second quarter.
By contrast, Aramco’s results reflected its “financial resilience,” Nasser said, as the company presses ahead with a plan to pay $75 billion in dividends this year.
Nasser also voiced optimism over what he called a “partial recovery in the energy market” amid an easing of virus restrictions in some countries.
But amid low crude prices, Aramco is looking at cutting its 2021 budget by between eight and 10 percent from this year’s already reduced levels, the Energy Intelligence group reported last month.
Aramco has said it expects capital expenditure to be at the “lower end of the $25 billion to $30 billion range” this year.
That is significantly lower than its expenditure of $32.8 billion in 2019, according to Energy Intelligence.
“Cutbacks have already caused Aramco to delay plans to expand production from its offshore fields,” Energy Intelligence said in a report.
“The offshore program was a core element of a push to raise the company’s oil production capacity.”
The company has also slashed hundreds of jobs as it seeks to reduce costs, Bloomberg News reported in June.
Saudi Arabia, the world’s biggest crude oil exporter, has been hit hard by the double whammy of low prices and sharp cuts in production.