According to the research data analyzed and published by StockApps.com, Saudi Aramco’s profits dropped by 50% to $23.2 billion in H1 2020. During H1 2019, net income was $46.9 billion. Q2 2020 saw an even bigger decline at 73%, from $24.7 billion to $6.6 billion.
The company’s performance reflected the devastating condition in oil markets. According to the Organization of the Petroleum Exporting Countries (OPEC), Brent crude was priced at $68.44 at the start of 2020. It had dropped to a low of $20.46 by the end of April 2020.
Saudi Aramco pays $37.5bn dividends in H1 2020
Aramco’s free cash flow during H1 2020 was $20.6 billion, compared to $38 billion in H1 2019. Despite this, Aramco paid out a total of $37.5 billion as dividends during H1 2020. The dividend payout for the period almost doubled the free cash flow. According to Bloomberg, the cash flow is unlikely to meet the dividend target until 2024.
In spite of its poor performance, Aramco was among the industry leaders as BP suffered a $6.7 billion loss while Exxon Mobil lost $1.1 billion. As a result of a demand-supply imbalance for oil, Brent crude has an average price of $41.19 per barrel in 2020. In 2019, the average price was $64.34 according to the US Energy Information Administration (EIA). The EIA predicts a 2021 average of $47.07 per barrel for Brent.
As of May 2020, Aramco was the largest company worldwide with a market capitalization of $1.685 trillion according to Forbes. Moreover, according to CEO World, it ranks fifth on the list of best-performing companies globally. A day after its successful IPO in December 2019, Aramco hit a $2 trillion market cap. It became the first publicly traded company to do so.
In mid-August 2020, Aramco temporarily lost the title of the largest company by market cap to Apple. Following the September tech sell-off, Aramco was able to gain back the crown.