RIYADH: Energy giant Saudi Aramco on Tuesday reported a 25% slump in first-quarter net profits due to low oil prices, saying the coronavirus crisis will dampen demand and full-year earnings.
The world’s largest listed firm posted a net profit of 62.5 billion riyals (US$16.66 billion) in the three months to March, compared to US$22.2 billion a year earlier.
The company said the drop in earnings mostly reflected a decline in crude oil prices, as well as shrinking margins in the refining and chemicals businesses.
“The Covid-19 crisis is unlike anything the world has experienced in recent history and we are adapting to a highly complex and rapidly changing business environment,” CEO Amin Nasser said.
The energy behemoth said that a steep decline in global demand for energy caused by the coronavirus pandemic would weigh on its full-year results.
“Longer term we remain confident that demand for energy will rebound as global economies recover,” said Nasser, adding that the company plans to continue to reduce capital spending.
Aramco was listed on the Saudi Tadawul market in December following a historic US$29.4 billion initial public offering – the world’s largest – but since then has faced a torrid environment.
Last year it reported a 20.6% decline in its annual net profit to US$88.2 billion due to low oil prices and production levels.
Oil prices slumped to nearly two-decade lows in March, losing almost two-thirds of their value due to weak demand resulting from the impact of the coronavirus pandemic.
Prices plummeted further in April amid a price war between Russia and Saudi Arabia as the major producers scrambled to secure market share.
Riyadh’s production soared to a record 12.3 million, pushing stockpiles to unsustainably high levels.