Saudi Aramco reported its financial results with a 44% fall in net profits to SAR 183.76 ($49bn) for the year 2020. Reuters reports that the fall in Aramco’s profits compares with the Saudi government’s 30.7% decline in oil revenues last year as the company continued paying dividends to the government. Aramco’s free cash flows were at $49bn, down 37% from $78.3bn in 2019. The state-owned oil giant declared a dividend of $75bn and expected 2021 capex at around $35bn. This would result in a lower capex from its previous guidance of $40bn-$45bn. Aramco took a step to expand its downstream business acquiring majority 70% stake in Saudi Basic Industries Corp (SABIC) last year for $69bn which saw its gearing (debt/equity) increase from its target range of 5%-15% to 21.8%. Reuters cites an HSBC report stating that Aramco has a $5bn payment towards the acquisition of a stake in SABIC coming up this April.
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