RIYADH/DUBAI (Reuters) - Saudi Arabia’s state oil giant Aramco said on Sunday its 2019 profit fell almost 21% due to lower crude oil prices and a drop in production volumes.

Aramco posted a net profit of 330.69 billion Saudi riyal ($88.11 billion) after zakat and tax in the period ended Dec. 31, down from 416.52 billion riyals a year earlier.[nL8N2B8051]

Analysts expected Aramco to post a net profit of 346.6 billion riyals ($92.35 billion) in 2019, according to an estimate of 15 analysts polled by Refinitiv.

Aramco, the world’s top oil producing company, raised $29.4 billion in a record initial public offering in December last year. [nL8N28J31O]

MARKET REACTION: Aramco shares down 1.6% at 28.55 riyals at 1100 GMT, 10.3% below December IPO price of 32 riyals.

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COMMENTARY

MAZEN AL SUDAIRI, HEAD OF RESEARCH, AL RAJHI CAPITAL:

“Given that oil companies are dividend based, today’s results confirm our view that Aramco is in solid position to contribute distributing good dividends.

Despite the economic headwinds and low oil prices, Aramco will be able to maintain good dividends at a price of $40 or even $20 bp for Brent crude.”

YOUSEF HUSSEINI, ASSOCIATE DIRECTOR, CHEMICALS, EQUITY RESEARCH, EFG-HERMES:

“We are currently forecasting $225 million in EBITDA utilizing an oil price forecast of $65/bbl. Of-course there is now downside to this number. Our analysis indicates that each $10/bbl in oil price change would impact our EBITDA forecast by (around) $35 billion.”

FADL ALBOAINAIN, A SAUDI ECONOMIST:

“Despite the economic and environmental challenges Aramco managed to deliver excellent results. It is outstanding how the company managed to overcome the September attacks on its facilities and successfully manage its IPO.”

“Cutting capex (capital expenditure) for 2020 is significant, it comes as a reaction to current market conditions. However, the company plans to raise its production capacity to 13 million barrels per day, which will require additional investments.”