Saudi Aramco Says Profit Fell 73 Percent as Demand for Oil Shrank

Saudi Aramco Says Profit Fell 73 Percent as Demand for Oil Shrank

Saudi Aramco, the world’s largest oil company, said on Sunday that its quarterly earnings plunged more than 73 percent compared to a year ago, as lockdowns imposed to curb the coronavirus pandemic drastically cut the demand for oil and slammed prices. Despite the steep fall in earnings, to $6.6 billion from $24.7 billion, the company said it would continue paying a quarterly dividend of $18.75 billion, almost three times its cash flow. Aramco is locked into paying such a large amount — $75 billion a year — because of commitments made in the run-up to its initial public offering on the Saudi Tadawul stock exchange. Nearly all of the dividend money will go to the Saudi government, which owns more than 98 percent of the company. Continuing to pay such a large dividend distinguishes Aramco from other oil giants, like BP and Royal Dutch Shell, which have recently cut their payouts to preserve capital in difficult times.
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