Saudi Aramco posts strong results in Q1 despite challenges, expects COVID-19 to weigh on revenue, says CEO

Saudi Arabian Oil Company (Saudi Aramco) demonstrated a strong financial and operational performance in Q1 2020 despite a challenging macro environment and lower energy demand caused by the COVID-19 pandemic, said President & CEO Amin Nasser in a statement.

“We have delivered solid earnings with robust free cash flow, despite weak energy demand and low oil prices. We remain committed to the safety of our people while delivering on our long-term value creation strategy for all of our shareholders," stated Nasser.

He added that Saudi Aramco is adapting to a highly complex and rapidly changing business environment, noting it demonstrated resilience during economic cycles and has an unparalleled position due to a strong balance sheet and low-cost structure.

Nasser also indicated that Saudi Aramco took steps in Q1 2020 to further optimize its planned 2020 capital spending and identified opportunities to improve operational productivity.

“We retain significant flexibility to adjust expenditures and have considerable experience in managing the business through times of adversity. This resilience will enable us to continue delivering on our commitments to our shareholders," Nasser stressed.

As for the remainder of 2020, Saudi Aramco expects the impact of the COVID-19 pandemic on global energy demand and oil prices to weigh on its earnings.

"We continue to reinforce the business during this period by reducing our capex and driving operational excellence," he noted, adding that the world's largest oil exporter we remain confident in the longer term that demand for energy will rebound as global economies recover.

Saudi Aramco posted a 24% year-on-year (YoY) drop in net profit after Zakat and tax to SAR 63.53 billion for Q1 2020, compared to SAR 83.23 billion in Q1 2019.