Saudi Aramco on Sunday said it plans to cut capital spending in the wake of the coronavirus outbreak, as it posted a 21% decline in 2019 net profit due to a drop in oil prices and production, its first earnings announcement as a listed company.
The world's most profitable company and by far its biggest oil producer, Aramco listed its shares in Riyadh in December in a record $29.4 billion initial public offering that valued it at $1.7 trillion.
Its shares fell below the IPO price last week for the first time, as oil prices crashed after the collapse of an output deal between OPEC and non-OPEC members which led to an oil price war between Riyadh and Moscow. Saudi Arabia has said it plans to ramp up production to gain market share.
Aramco CEO Amin Nasser said in a statement the oil giant has taken steps to rationalise planned capital spending in 2020 following the coronavirus outbreak.
The company expects capital spending for 2020 to be between $25 billion and $30 billion in light of current market conditions and recent commodity price volatility, compared to $32.8 billion in 2019.
Brent crude futures last traded at $33.85 per barrel on Friday, down from about $64 when Aramco listed its shares.
Despite a drop in income, Aramco said it paid a dividend of $73.2 billion in 2019 and intends to declare a cash dividend of $75 billion in 2020, paid quarterly.
Aramco, which is 98% owned by the Gulf kingdom, reported a net profit of $88.2 billion in 2019, down from $111.1 in 2018.
Analysts had expected Aramco to post a net profit of 346.6 billion riyals ($92.6 billion) in 2019, according to an estimate of 15 analysts polled by Refinitiv.
Last week Aramco said it would launch a program to boost production capacity for the first time in more than a decade, signaling to Russia and other rivals it was ready for a long battle over production levels and market share.
Aramco said the drop in earnings was mainly due "lower crude oil prices and production volumes, coupled with declining refining and chemical margins, and a $1.6 billion impairment associated with Sadara Chemical Co."
Aramco remains the world's most profitable company, beating Western oil majors such as Exxon Mobil Corp, and Apple Inc, which made $55 billion in its last financial year that ended in September.
Aramco said it generated total revenues, including other income related to sales, of 1.106 trillion riyals in 2019, down from 1.194 trillion riyals the year earlier.
Aramco said it had total hydrocarbon production of 13.2 million barrels per day of oil equivalent in 2019, compared to 13.6 million barrels per day of oil equivalent in 2018.