* Aramco's net profit falls 44.4% in 2020
* Lowers 2021 capex guidance to about $35 bln
* To pay dividends of $75 bln for 2020
* Free cash flow fell to $49 bln last year
(Recasts lead, adds CEO fresh comments)
By Hadeel Al Sayegh, Saeed Azhar and Yousef Saba
DUBAI, March 21 (Reuters) - Saudi Arabian state oil giant
Aramco is betting on an Asian-led rebound in energy
demand this year after it reported a steep slide in net profit
for 2020 on Sunday and scaled back its spending plans.
The COVID-19 pandemic took a heavy toll on the company and
its global peers in 2020, but oil prices have rallied this year
as economies recover from last year's downturn and after oil
producers extended output cuts.
"We are pleased that there are signs of a recovery," Aramco
CEO Amin Nasser told an earnings call. "China is also very close
to pre-pandemic levels. So in Asia, East Asia in particular,
there is strong pickup in demand."
He said demand in Europe and United States would improve
with more deployment of vaccines. Global oil demand is expected
to reach 99 million barrels per day by the end of this year, he
said.
Aramco lowered its guidance for capital expenditure in 2021
to around $35 billion from a range of $40 billion to $45 billion
previously, according to a disclosure to the kingdom's Tadawul
bourse. Capital spending in 2020 was $27 billion.
The world's largest oil exporter said net profit fell 44.4%
to 183.76 billion riyals ($49 billion) for the year ended Dec.
31, from 330.69 billion riyals a year earlier.
Analysts had expected a 2020 net profit of 186.1 billion
riyals, according to the mean estimate of analysts in
Refinitiv's Eikon.
Aramco declared a dividend of $75 billion for 2020, but
Nasser said there was no intention to increase the dividend this
year from what's been pledged.
"The dividend is in line with expectations, which is what
holders of Aramco will care about most, but lower capex implies
the company does not expect high oil prices to last for the
long-term," said Hasnain Malik, head of equity research at
Tellimer.
Aramco's shares were marginally down 0.6% after its results.
Through most of last year, Aramco's shares held up well
against global oil companies in emerging and developed markets,
but underperformed against the company's peers when oil prices
recovered.
BEARING THE BRUNT
"Looking ahead, our long-term strategy to optimize our oil
and gas portfolio is on track," Nasser said.
Aramco's 44.4% drop in 2020 profit compares with a 30.7%
decline in oil revenues last year for the Saudi government, with
the steady dividends paid to the state despite lower oil prices
contributing to Aramco bearing the brunt of the crisis more than
the treasury, said Monica Malik, chief economist at Abu Dhabi
Commercial Bank.
Oil prices lost just over a fifth of their value in 2020.
Brent crude last traded at $64.53 a barrel on Friday
compared with around $51 in December.
Earnings of top western oil companies were hammered in 2020,
with Royal Dutch Shell's profit dropping to its lowest
in at least two decades and Exxon Mobil, the largest U.S. energy
company, posting its first-ever annual loss.
Aramco said free cash flow fell to $49 billion last year
from $78.3 billion in 2019.
($1 = 3.7505 riyals)
(Additional reporting by Davide Barbuscia in Dubai and Ron
Bousso in London; Editing by Kim Coghill and Pravin Char)
