Saudi oil giant Aramco reports 44.6% loss to profit in third quarter
Saudi Arabia has suffered a fresh economic blow as its giant oil company Aramco which is responsible for a bulk of government finances has reported a massive loss to net profit in the third quarter this year.
Reports on Tuesday suggested that Aramco had lost nearly 36 billion riyals ($9.5 billion) in quarterly net profit as margins dropped 44.6 percent to $44.21 billion riyals in the three months to September 30.
That comes as Saudi Arabia is struggling with strained finances because of lower sales of oil and the economic impacts of the coronavirus pandemic.
Aramco, the world’s largest oil company, has seen its sales hampered since early 2020 mainly because of a global supply glut which was exacerbated by the pandemic as it spread around the world in March and April.
The company was listed in the Saudi stock market last year as part of efforts to attract finances needed to advance ambitious economic programs in the kingdom and diversify its economy away from oil.
The listing, however, has further pressured the finances in the oil-rich country as Aramco has committed itself to guaranteed payment of dividends to shareholders.
That strategy has partly prevented a fall in the value of Aramco shares but experts believe the company would have serious problems funding the guaranteed payment in future unless oil prices rise to above $55 per barrel.
Aramco’s loss of profit also comes as Saudi Arabia, the largest exporter of oil in the world, should continue to comply with a series of supply cuts agreed in May between members of an international alliance of oil producing nations.
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