Saudi Arabia’s state-controlled oil company is moving ahead with a $75 billion U.S. dividend payment despite falling profits and rising debt.
Saudi Aramco said net income for the second quarter fell to $6.6 billion U.S., down 73% from a year earlier, after global crude oil prices collapsed. Saudi Aramco will pay a dividend of $18.75 billion U.S. for the quarter, most of it to the government, which owns 98% of the company’s stock.
Aramco’s performance and demand for energy will probably improve over the rest of the year as nations ease coronavirus lockdowns, according to Saudi Aramco Chief Executive Officer Amin Nasser. "We are seeing a partial recovery in the energy market," he said in a news release.
The results cap a turbulent period for the world’s biggest oil exporter. Prices briefly turned negative in the U.S. in April as the virus battered the global economy and Aramco slashed hundreds of jobs. Unlike Aramco, rivals such as BP Plc (NYSE:BP) and Royal Dutch Shell Plc (NYSE:RDS.A) have cut their dividends amid the turmoil.
Saudi Arabia generates most of its revenue from crude oil, and its budget deficit is set to exceed 12% of gross domestic product in 2020, according to the International Monetary Fund. The shares of Aramco, which Apple dethroned last month as the world’s most valuable public company, rose 0.3% to 33.05 riyals in Riyadh trading. They’ve declined 6.2% this year, much less than the stock price decline of Exxon Mobil Corp., which has fallen 38%, and Shell, down 50% year-to-date.
