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Is $49b not enough profits if it was a 44% drop?MENA

Is $49b not enough profits if it was a 44% drop?

Last year was a tough year for the oil industry, and the largest producer (aka Saudi Aramco) was not immune. On Sunday, the Saudi Arabian state-backed oil titan announced its profits for 2020 fell by 44% to $49b. The drop was largely the result of historically low oil prices (caused by the Covid-19 pandemic) and a subsequent price war between oil rivals Saudi Arabia and Russia (lots of drama there).

Despite the significant profit shortfall, Saudi Aramco is honoring its quarterly dividend payout through thick or thin. In fact, it recently issued international bonds to finance its dividend commitment.

Shares of Saudi Aramco have been trending downward on the Tadawul since March 11th. However, as long as the 98% majority owner (aka the Saudi government) is getting its dividend, we doubt that the profit loss will have much effect on share price long-term.

why it matters
Saudi Aramco has officially lost the title of the world’s most profitable company to Apple (AAPL). Let’s hope the Saudis don’t take this too hard, it was a good run!