Despite of 25 percent plunge in profits, Saudi Arabia’s state controlled oil giant Aramco has retained its massive dividend, and indicated that it would keep spending in check as it braces for deeper damage from the oil crisis.
According to media reports, said to be the world’s most valuable listed company Saudi Aramco will pay a dividend of $18.75 bn (€17.25bn) for the first three months of 2020. That would leave it on track to meet its full-year goal of $75 bn, though it did not specify if it was still committed to that number.
The dividends “are the highest of any listed company worldwide” and will be paid in the second quarter, Aramco said. The payout is crucial for the kingdom, which holds about 98 pc of Aramco and is facing its worst financial turmoil in decades.
On Monday this week, the government tripled Vat and cut bureaucrats’ allowances as it looks to rein in a fiscal deficit that could reach 13pc of gross domestic product this year. At the time of Aramco’s record initial public offering in December, the dividend was a huge part of its appeal.
Kingdom of Saudi Arabia KSA has announced to suspend the cost of living allowance and increasing value added tax (VAT) as part of tackling measures. Finance Minister of Saudi Arabia, Mohammed Al-Jadaan said “Cost of living allowance will be suspended as of June first, and the value added tax will be increased to 15% from 5% as of July first.” He said “the twin measures are part of efforts to shore up state finances, which have been battered by low oil prices and the coronavirus crisis.” Al-Jadaan warned last week that Saudi Arabia would have to take “strict and painful measures” to deal with the twin impact of coronavirus pandemic and falling world oil prices.