Saudi Aramco’s CEO says there have been ‘early signs of recovery’ in the third quarter of 2020, following unprecedented upheaval caused by the global pandemic.

Amin H Nasser, Aramco’s President and CEO, said despite the headwinds facing global energy markets, improved economic activity had led to signs of recovery, and that he was confident that Aramco had the ability to manage through ‘challenging times’.

Despite a year-on-year profit fall amounting to 44.6 percent - to SAR 44.21 billion ($11.79 billion) in 2020 from SAR 79.84 billion ($21.29 billion) in 2019, the company declared a shareholder dividend of $18.75 billion for the third quarter.

In a statement in the company’s third quarter interim report, Nasser said Aramco was maintaining its commitment to shareholder value.

“We continue to adopt a disciplined and flexible approach to capital allocation in the face of market volatility,” he said.

“We are confident in Aramco’s ability to manage through these challenging times and deliver on our objectives.”

Aramco’s Q3 net profit grew 79.6 percent compared with the second quarter - from SAR 24.62 billion ($6.56 billion), at a time when global oil prices went into negative territory for the first time in history.

In its Q3 interim report, Aramco said early signs of a recovery in global energy markets had been seen, as some governments eased COVID-19 related restrictions, stimulating demand, leading to crude price increases.

“This increasingly favourable economic environment, together with Aramco’s low cost of production and unique operating model, resulted in improved earnings and cash flows for the third quarter.

“These financial results demonstrate Aramco’s resilience across volatile crude oil price cycles and are underpinned by its operational excellence and its position as one of the most reliable suppliers of crude oil to the world,” said the report.

Nasser also highlighted the integration with chemical manufacturing company SABIC, which he said was ‘proceeding as planned’ and its work producing the first blue ammonia shipment for zero carbon power generation in Japan.

“Our resilience is supported by our unique scale, low upstream carbon intensity and low production costs.

“As the global economic and social landscape evolves, these strengths and our continued drive to lower greenhouse gas (GHG) emissions mean we are well positioned to support the energy needs of the global economic recovery,” he said.

Aramco held its much anticipated initial public offering (IPO) at the end of 2019, the world’s largest ever IPO, after which the company was valued at $1.7 trillion.

(Reporting by Imogen Lillywhite; editing by Daniel Luiz)

(imogen.lillywhite@refinitiv.com)

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