Aramco to cut capital spending over coronavirus, reports 21% plunge in annual profit

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Aramco to cut capital spending over coronavirus, reports 21% plunge in annual profit

On Sunday, the 15th of March 2020, Aramco, Saudi’s government-backed world’s largest oil exporter and the most profitable company across the globe on an unaudited basis, had released its first earnings’ report as a publicly listed company and missed an analysts’ forecast, while the oil mogul with a capacity to produce 12 million barrels of oil per day or 15 per cent of world’s entire output had also added that it had been planning to axe capital expenses this year amid a clattering coronavirus outbreak flumping demand appetites across the globe.

Aside from that, as the company was touted as the holder of the world’s largest IPO, a 21 per cent decline in net operational profit last year meant the Western investors might be right to sway away from Aramco IPO and the company would fall short of sufficient funds to proffer the promised dividends on September this year.

Meanwhile, as some analysts had criticized the Gulf investors who had poured fresh liquidity only to witness crude oil futures’ prices flumping more than 50 per cent since Aramco’s IPO, another group of analysts raised question over the precise scale of profitabity of the company, since there had not either been any coronavirus-related demand concerns or price wars last year.

Besides, adding that the company had already taken measures to “rationalize” its planned capital spending following a record-setting IPO, Aramco CEO Amin Nasser said in a statement on Sunday (March 15th), “The recent COVID-19 outbreak and its rapid spread illustrate the importance of agility and adaptability in an ever-changing global landscape. ”