Saudi Aramco will make a $75 billion dividend payout, the largest of any listed company, according to Bloomberg. The payout, which almost all goes to Saudi Arabia’s government, comes amid disruptions to oil markets due to the coronavirus pandemic and a price war that sent crude prices down.
The dividend by Aramco is a key source of cash for Saudi Arabia’s government after the oil dependence economy was hit by the coronavirus.
Aramco has taken more debt in the past 12 months to keep up the dividend in the wake of dwindling cash flow, although its gearing remains below those of key competitors.
The company’s gearing rose from minus 5% in March to 22% in September, above the firm’s target of no more than 15%.
Aramco’s net income for 2020 was 184 billion riyals or $49 billion, beating analysts’ expectations, but down 44% from the previous year.
Aramco does not expect dividends to rise above $75 billion this year.
The oil giant expects capital expenditure to be $35 billion, up from $27 billion last year, but down from the previous guidance of about $45 billion.
The company is optimistic about 2021 growth following price recoveries and improving energy consumption in some regions.
Investors are, nonetheless, concerned about an increase in drone and missile attacks on Aramco’s facilities by Yemen’s Houthi rebels.
Saudi Aramco stock closed at 35.40 riyals after gaining 0.6% on Sunday.
