Saudi Arabia’s oil giant pressed ahead with a plan to pay $75 billion in dividends this year.
Saudi Aramco said net income in the three months ending in June was $6.6 billion, according to a statement. Aramco will pay a dividend of $18.75 billion for the quarter.
“Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results,” said Chief Executive Officer Amin Nasser. “We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies.”
Prices briefly turned negative in the US in April as virus lockdowns battered the global economy and Aramco slashed hundreds of jobs.
Saudi Arabia and Russia subsequently led a push by Organisation of Petroleum Exporting Countries (Opec) and its partners to reduce production and prop up crude prices. Though they’ve rallied, Brent is still down 33% this year.
Aramco’s shares rose 0.3% to 33.05 riyals in Riyadh as of 10:31 am on Sunday.
The Dhahran-based firm’s gearing ratio soared to 20.1% at the end of June from minus 5% in March. That was in large part due to the debt Aramco took on when it bought chemicals company Saudi Basic Industries Corp. for $70 billion. The deal was funded by a loan from the Saudi Arabia’s sovereign wealth fund, which Aramco plans to finish repaying in 2028.
Aramco said in June it may issue more bonds or loans to meet its dividend commitment.
Capital expenditure will be at the lower end of the $25 billion-to-$30 billion range it set in March, according to Sunday’s statement.
Aramco’s Fadhili natural-gas plant reached full production capacity of 2.5 billion standard cubic feet during the second quarter. The company is boosting gas output to feed local businesses and replace valuable crude that power plants burn to meet rising demand for air conditioning during the summer. Aramco started the Fadhili gas plant last year and has gradually ramped up output.