Saudi Aramco, the spearhead of the kingdom’s oil price war, posted a 21% drop in full-year profit and cut planned 2020 capital expenditure.
The oil giant cited lower crude oil prices and production for the decline in profit. It’s the first time Aramco reported results as a listed company since its record $29 billion share sale in December.
Key 2019 numbers:
- Net income including minority interests: 330.7 billion riyals ($88 billion) vs 416.5 billion riyals a year ago
- Revenue: 1.11 trillion riyals vs 1.19 trillion riyals
- Analysts’ estimate: 1.2 trillion riyals (range: 1.14 tillion riyals to 1.24 trillion; 12 analysts)
- Operating profit: 674.9 billion riyals vs 798.4 billion riyals
- Analysts’ estimate: 685 billion riyals (range: 667 billion riyals to 712 billion; 15 analysts)
- Expects capital spending for 2020 to be between $25 billion and $30 billion in light of current market conditionsand recent commodity price volatility
- Capital expenditure last year was $32.8 billion compared with $35.1 billion in 2018
An oil-price war led by Saudi Arabia, which holds all but 1.5% of Aramco’s shares, and Russia threatens more pain for the company as producing nations prepare to boost supplies at discounted prices to markets already reeling from weak demand. Crude oil has lost half of its value since the beginning of the year.
Prices fell last year even as Saudi Arabia trimmed output as part of the joint effort between OPEC and producers like Russia to rein in production. Drone and missile attacks on two of Aramco’s biggest oil facilities in September temporarily slashed production by more than half, but didn’t cause a big surge in prices.
Brent crude averaged $64.12 a barrel in 2019 compared with $71.67 the previous year. Saudi production slipped to an average of 9.83 million barrels a day from 10.65 million in 2018, according to data compiled by Bloomberg. The company had restored output to pre-attack levels by early October.