Saudi Aramco stuck by its $75bn dividend pledge despite a 44 per cent drop in 2020 profits after the pandemic triggered lockdowns and travel bans that slashed oil demand, caused crude prices to tumble and weakened margins in its refining and chemicals businesses.

Saudi Arabia’s state energy company on Sunday reported full-year earnings of $49bn, in what Amin Nasser, chief executive, said was an “unprecedented and difficult year”.

Profits were in line with an analyst net income estimate compiled by the company, but free cash flow slid nearly 40 per cent to $49bn, significantly lower than the level needed to cover the dividend.

Saudi Aramco, which made its stock market debut in December 2019, has been far more resilient than its international peers but has still suffered a massive hit to its finances, which are crucial for filling government coffers.

The company’s debt levels surged last year as the group committed to paying out its dividend, most of which will go to the Saudi state, its majority shareholder.

Gearing, which it defines as a measure of the degree to which operations are financed by debt, has surged from minus 4.9 per cent in the first quarter to 21.8 per cent in the third quarter as it spent $69bn for a majority stake in Sabic, the Saudi chemicals company.

Saudi Aramco said the level had increased “slightly” in the fourth quarter, without disclosing a figure, but the company plans to release more detailed financial data on Monday.

Saudi Arabia, the world’s largest oil exporter, joined forces with other Opec countries and producers outside of the cartel to curb output last year by 9.7m barrels a day. The intention was to bolster oil prices, which rose above $70 a barrel earlier this month.

Although the group has gradually released more barrels in recent months, uncertainty about the trajectory of the oil market’s recovery and the emergence of new coronavirus variants forced producers to hold back from unleashing more supply for April.

In order to conserve cash, the company cut capital expenditure sharply, spending $27bn in 2020, down from $32.8bn the previous year. It expects the figure for 2021 to be about $35bn, which the company said was “significantly lower” than the planned $40-$45bn.

Saudi Aramco also delayed projects, suspended drilling in some areas and stalled some deal activity. Yet, the company still plans to increase its maximum production capacity to 13m b/d.

Nasser said he was “optimistic” about the oil market outlook compared to 2020, as demand rebounds and vaccines are rolled out globally.

Demand is around 92-93m b/d — having recovered from around 80m b/d last year — and would reach close to 99m b/d by the end of the year as consumption in major markets in Asia accelerates. Next year will look “even better”, Nasser said.

Saudi Aramco infrastructure has been attacked repeatedly by drone and missile attacks over the past two years, most recently on Friday.

Nasser dismissed the threats that have largely been claimed by Iran-allied Houthi fighters in Yemen, adding: “We are capable under any scenario to put the facility back on stream . . . and ensure supply to our customer is met.”