Saudi Arabia's oil giant Aramco reported a drastic 20.6-percent drop in its net profit for 2019, Arabian Business reported.
In a statement issued this week, officials said the company posted net profits of $88.2 billion last year compared to $111.1 billion in 2018. The state-owned entity also made $1.6 billion of impairment provisions for losses associated with one of its subsidiaries, the Sadara Chemical Company.
Once named the world's most profitable company, the firm explained that its losses were due to low oil prices and production levels.
This is the first net result announced by the energy company after it opened to investors in a historical $2.03-trillion valuation at its initial public offering (IPO) and listing on the Saudi Tadawul market last December.
Despite the numbers, Aramco's CEO Amin Nasser stressed that 2019 was an "exceptional year" for the company.
"Through a variety of circumstances -- some planned and some not -- the world was offered unprecedented insight into Saudi Aramco's agility and resilience," Nasser explained.
"Our unique scale, low costs, and resilience came together to deliver both growth and world-leading returns, while also maintaining our position as one of the world's most reliable energy companies," he added.
The 2019 earnings were not affected by the ongoing novel coronavirus outbreak nor the price war currently going on between Saudi Arabia and Russia. The latter sent oil prices crashing worldwide and erupted after the two nations failed to see eye-to-eye on extra output cuts to overcompensate for prices dented by the outbreak of the coronavirus pandemic.
Nasser said that the recent happenings, namely COVID-19's spread around the world, remind him of the "importance of agility and adaptability in an ever-changing global landscape."
Oil prices continue to tumble and are affecting companies across the region
Saudi Aramco has been hit by the drop in oil prices, with its market value dropping to around $1.55 trillion on Thursday. Despite that, the company continues to be the world's largest publicly listed firm.
It's now working on increasing outputs and signing sponsorship deals that aim to bolster its position even further.
The situation created by the near-collapse of oil markets hasn't only made things difficult for Aramco but has also left several other large Arab entities struggling with losses.
These include another major Saudi company, the Basic Industries Corp (SABIC). The firm is considered one of the largest petrochemical manufacturers in the world and reported a major decline in profits in the last quarter of 2019.
SABIC recently revealed that it reached a 74-percent decline in profits, recording a loss of 720 million Saudi riyals ($192 million) in the fourth quarter of 2019. The numbers paint a stark reality, especially when compared with the company's Q4 2018 profits which exceeded 3.2 billion Saudi riyals.
Companies across the Gulf, including the UAE, have also been reporting losses and these include Dubai's DAMAC Properties.
The company reported a net loss of 36.9 million dirhams ($10 million) for 2019, a significant 103-percent decline from its 2018 1.15-billion dirham ($313 million) profit.
The real estate giant was affected by changes in property purchasing trends which in turn were dropping due to plummeting oil prices.