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Seven Days: 15 May 2020

Seven Days: 15 May 2020

Aramco’s profits plunge

Oil turmoil takes toll

Amid the collapse in crude oil prices and a demand squeeze, Saudi Arabian Oil Co (SAU:2222) – also known as Saudi Aramco – saw its operating profit drop by almost 25 per cent to $34.6bn (£28.2bn) in the first quarter of 2020. Still, the state energy company plans to hand shareholders $18.8bn in dividends, more than the $15bn of free cash flow it generated during the period. The oil and gas giant is sitting on $13.4bn of net cash. Aramco may be adjusting to the crisis by cutting capital expenditure and production, but its share price seems detached from reality, down just 2 per cent from December’s float price.

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