The Saudi Arabian Oil Company (Aramco) has announced its full-year 2020 results, demonstrating exceptional resilience despite the macroeconomic impact of Covid -19 and delivering on its intended dividend payments to shareholders.
Aramco achieved a net income of $49 billion in 2020, one of the highest earnings of any public company globally. It displayed strong financial resilience in one of the most challenging periods for the industry, during which revenues were impacted by lower crude oil prices and volumes sold, and weakened refining and chemicals margins.
Aramco declared a dividend of $75 billion for the year, reflecting the outcome of the company’s strong performance. It continues to preserve a strong balance sheet and its gearing ratio at December 31, 2020, was among the lowest in its industry. Meanwhile, its ROACE of 13.2% was the highest in the industry.
Through its flexible capital program and prudent financial management, the company adjusted spending and focused on high-return opportunities. Capital expenditure in 2020 was $27 billion due to the implementation of optimization and efficiency programs, representing a significant saving on capital expenditure of $33 billion in 2019.
The company continues to assess its capital expenditure and efficiency programs and expects capital expenditure for 2021 to be around $35 billion, significantly lower than the previous guidance of $40-$45 billion.
In the fourth quarter, Aramco’s international bond issuance achieved record demand for a 50-year tranche and was 10 times oversubscribed compared to its initial offering size. This global investor interest demonstrated market confidence in the company’s long-term strategy and performance outlook.
In 2020, Aramco’s average hydrocarbon production was 12.4 million barrels per day of oil equivalent, including 9.2 million barrels per day (mmbpd) of crude oil.
Commenting on the results, Aramco President and CEO Amin H Nasser said, “In one of the most challenging years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility. Our exceptional performance during such testing times owed much to the unwavering spirit and resilience of our employees, who set operational records and continued to meet the world’s energy needs both safely and reliably.
“As the enormous impact of Covid-19 was felt throughout the global economy, we intensified our strong emphasis on capital and operational efficiencies. As a result, our financial position remained robust, and we declared a dividend of $75 billion for 2020.
“At the same time, the accelerated deployment of digital technologies across the company significantly enhanced our performance, and we continued to make progress on breakthrough low-carbon solutions.
“Looking ahead, our long-term strategy to optimize our oil and gas portfolio is on track and, as the macro environment improves, we are seeing a pick-up in demand in Asia and also positive signs elsewhere. We remain confident that we will emerge on the other side of this pandemic in a position of strength.”