Saudi Aramco Gets Clobbered as Profits Fall 73.4 Percent in the Second Quarter 2020
Posted on 08/10/2020
This could be the worst quarter in the modern history of the oil industry, as oil majors got clobbered by the viral pandemic. Saudi Aramco, officially the Saudi Arabian Oil Company, had its profit fall deeply 73.4% in the second quarter of 2020. This is due to a massive drop in energy demand and prices due to the novel coronavirus (COVID-19) pandemic. Saudi Aramco still plans to pay US$ 75 billion in dividends this year, subject to board approval and market conditions.
Luckily, Saudi Aramco is seeing gasoline and diesel demand in China growing to near pre-COVID-19 levels.
Pessimistic Total Writes-Down Oil-Sand Assets by $8.1 Billion
Preparing for a prolonged pandemic and a worsening global energy market, French oil giant Total S.A. has announced their plans to write-down their assets in Canada and Australia. This move to restructure the company’s balance sheet follows a similar course of action taken by Royal Dutch Shell plc who completed a US$ 22 billion write-down at the end of July.
However, Total, unlike Shell, still has other restructuring strategies it has not explored yet. Shell has already made cuts to their dividend, workforce, and capital expenditures, in addition to their recent write-down. Investors should look to see if Total will follow suit and make cuts to their dividend and furlough more employees.
Most analysts seem to agree that Total’s second quarter earnings will certainly be lacking due to the coronavirus pandemic. But, upon release, investors will have to keep a keen eye on their future cost-cutting strategies that Total’s competitors have been pursuing.
