Full-year 2020 highlights
Financial
- Net income: SAR 184bn ($49bn)
- Dividends declared SAR 281bn ($75bn)
Operational
- Hydrocarbon production: 12.4 mmboed
- Crude oil production: 9.2 mmbpd
- Reliability: 99.9%
Kingdom of Saudi Arabia, 23 March 2021: The Saudi Arabian Oil Company (Aramco), while announcing its full-year results on 21 March, declared a dividend of $75 billion for 2020, despite being hit by the pandemic and a slump in crude prices.
“In one of the most challenging years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility” commented Aramco President & CEO Amin H. Nasser.
The shareholder payout is critical both for the domestic investors who poured money into the IPO last year and the government, its main shareholder.
Financial Highlights
Net income for 2020 was $49 billion, one of the highest earnings of any public company globally. Also, its ROACE of 13.2% was the highest in the industry.
Free cash flow was declared at $49 billion and cash flow from operating activities was $76 billion. The Company’s gearing ratio however climbed to over 20% post June 2020, primarily due to the consolidation of SABIC’s net debt onto Aramco’s balance sheet.
The capital expenditure in 2020 was $27 billion, reflecting a significant saving on capital expenditure of $33 billion in 2019, and was attributed to a focus on adjusted spending through focus on high-return opportunities and increased efficiencies.
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.
Aramco’s international bond issuance in the fourth quarter achieved record demand for a 50-year tranche and was 10 times oversubscribed compared to its initial offering size.
Operational Milestones
Even with lower capital expenditure in 2020, Aramco maintained an average hydrocarbon production of 12.4 million barrels per day of oil equivalent, including 9.2 million barrels per day (mmbpd) of crude oil. The historic acquisition of a 70% stake in SABIC by Aramco in June 2020 was a major step in establishing the Company as a leading petrochemical player with operations in more than 50 countries.
The Company maintained one of the lowest upstream carbon footprints in the industry, achieving an estimated upstream carbon intensity of 10.5 Kg of CO2 per barrel of oil equivalent in 2020 and scaled up developments aimed towards sustainable hydrogen usage.
President & CEO Amin Nasser said that “the accelerated deployment of digital technologies across the company significantly enhanced our performance and we continued to make progress on breakthrough low-carbon solutions.”
Amin H. Nasser expressed his confidence in the outlook for 2021, stating “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.”
Speaking virtually at CERAWeek earlier this month Nasser stated that current oil demand is at 94 million barrels, compared with pre-pandemic levels of 100 million, and that he expected this to rise to 99 million barrels by the end of the year, with demand and the market improving.
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