CEO of Aramco says the company still plans to pay a dividend of $75 billion despite a significant drop in its net profit. Profits for the company for the quarter ending in June 2020 fell by $6.6 billion compared to a similar period last year as COVID-19 cut the demand for crude oil, natural gas, and petroleum products. Nevertheless, the oil giant will still pay $18.75 billion for the quarter to its shareholders.
“We are committed to delivering sustainable dividends through market cycles, as we have demonstrated this quarter. Our intention is to pay $75 billion, subject to board approval, of course, and market conditions,” Bloomberg quotes Aramco CEO, Amin Nasser.
The pressure to pay dividends stems from Saudi Arabia’s current economic status. IMF anticipates a 12% budget deficit for the oil-reliant country for 2020. The Saudi government is Aramco’s biggest shareholder, owning 98% of the company’s shares.
In June, the company said that it could issue more bonds and loans to honour its dividend commitment.
Aramco CEO Optimistic About Recovery of Oil Demand
Aramco CEO expressed his optimism on the recovery of demand in the energy market as countries ease movement restrictions.
“As countries ease the lockdown, we expect the demand to increase. Look at China, their gasoline and diesel demand is almost at pre-COVID 19 levels. We are seeing that Asia is picking up and other markets.”
Analysts at Al Rajhi Capital-backed his optimism, pointing out that the company is going through the worst times in oil history, while still maintaining healthy figures.