Saudi Aramco Q3 profit slides 44.6% at Riyal 44.21 billion

Dubai — Saudi Aramco's profit in the third quarter crashed 44.6% at Riyal 44.21 billion ($11.79 billion) compared with Riyal 79.84 billion ($21.29 billion) for the same quarter of 2019, as the Saudi Arabian state-owned company continues to battle an ongoing market crash and slump in demand due to the pandemic.

Losses were partly offset by a decrease in crude oil production royalties resulting from lower prices and volumes sold, as well as a decrease in the royalty rate to 15% from 20%, lower income taxes and zakat, or obligatory charity payments, as a result of lower earnings, and higher other income related to sales for gas products, Aramco said in an announcement on the Tadawul stock exchange Nov. 3.

Total hydrocarbon production for the first nine months of 2020 was at 12.4 million b/d of oil equivalent, of which 9.2 million boe/d was crude oil.

Meanwhile, Aramco recorded Q3 capital expenditures of $6.4 billion as the company continues to cut costs. Total capex for 2020 is expected to be at the lower end of the $25 billion to $30 billion range for 2020, Aramco has said previously.

"We saw early signs of a recovery in the third quarter due to improved economic activity, despite the headwinds facing global energy markets," CEO Amin Nasser said in the results statement. "Meanwhile, we maintained our commitment to shareholder value by declaring a dividend of $18.75 billion for the third quarter."

However, Aramco's free cash flow was $12.4 billion in the third quarter, falling short of its dividend commitment.

Aramco, which listed 1.5% of its shares last December on the domestic Tadawul stock exchange, had secured the world's biggest initial public offering of $29.4 billion.

As part of its pitch to investors during the share sale, Aramco had pledged to issue $75 billion in dividend annually for five years.

The kingdom's export volumes are limited by its commitments to the OPEC+ production cuts, in an agreement intended to counteract plummeting demand caused by the coronavirus pandemic. Under the plan, Saudi Arabia's monthly output quota stands at 8.993 million b/d until the end of the year.