The world’s biggest oil exporter, Saudi Aramco, has reported massive losses for the second quarter, with its net profit nosediving 73.4 percent, as the Covid-19 outbreak crippled global demand for crude.
The oil giant’s net profit plunged to 24.6 billion riyals ($6.6 billion) for the three months to June 30, from 92.6 billion riyals ($24.7 billion) in the same period of 2019, according to a regulatory filing published at the Tadawul exchange where its stock trades. For the whole first half of the year, Saudi Aramco said its net income plunged to 87.1 billion riyals ($23.2 billion) down 50 percent from 175.9 billion riyals ($46.9 billion) one a year ago.
“Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results,” CEO Amin Nasser said, adding that the company is trying to adapt to the unprecedented conditions created by the pandemic. “We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies.”
The financial results, which were even worse than analysts predicted, however, did not sink the company’s stock. After the company presented the report on Sunday, its shares were up slightly by 0.15 percent. Notably, the company’s shares fell much less this year than those of its overseas peers. While Saudi Aramco stock slipped around six percent, those of Exxon Mobil were down 38 percent, while Shell declined by half.
Most energy companies have taken a painful blow from the coronavirus pandemic as lockdowns to contain the spread of the deadly virus limited travel and halted production, crushing demand for crude and sending oil prices into a tailspin. In April, US crude futures entered into negative territory for the first time in history.
While crude prices have already bounced from April lows thanks to output cuts agreed on by OPEC+ producers, they are still down around 30 percent from a year earlier.
Saudi Aramco went public last year, with its IPO becoming the largest in history. The oil giant has long held the position of world’s most valuable company – until last week, when it was dethroned by US tech giant Apple.
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