Saudi Aramco, the world's largest oil-exporting company, reported a 44 per cent slide in net profit for 2020 of 183.76 billion Saudi riyals ($49bn).
The company attributed the decline to "the impact of lower crude oil prices and volumes sold, and weakened refining and chemicals margins", in a statement to the Tadawul stock exchange, where its shares trade.
Revenue dropped 30 per cent to 768.11bn riyals.
“As the enormous impact of Covid-19 was felt throughout the global economy, we intensified our strong emphasis on capital and operational efficiencies," said president and chief executive Amin Nasser.
"As a result, our financial position remained robust and we declared a dividend of $75bn for 2020."
The company generated $49bn in free cash flow during the year.
It expects capital expenditure for 2021 to be about $35bn, which is lower than its previous guidance of $40bn to $45bn.
Aramco is navigating a challenging market environment in which prices remain volatile. Some major international oil companies have begun to write down the value of their fossil fuel assets.
Despite this, the company is bullish about "a pick-up in demand in Asia and positive signs elsewhere", said Mr Nasser.
"We remain confident that we will emerge on the other side of this pandemic in a position of strength," he said.
The company's hydrocarbon production last year stood at 12.4 million barrels of oil equivalent per day, of which crude accounted for 9.2 million barrels per day.
Aramco produced 12.1 million bpd in April 2020, its highest production level, before Opec+'s historic deal to cut supply.
The company's gas production from conventional and unconventional fields also surged to 10.7 billion standard cubic feet per day in August 2020.
It is limiting production in line with Riyadh's commitment to cut global output as part of the Opec+ alliance.
The kingdom is making an extraordinary cut of 1 million bpd until April as it supports the group's efforts to draw back 7.2 million bpd.
Aramco's earnings are "expected to improve" in line with higher oil prices and the winding down of production cuts, said Mazen Al Sudairi, head of research at Riyadh-based Al Rajhi Bank.
The company, which has "sufficient" upstream oil production capacity is likely to prioritise production of low-cost gas in 2021, he added.
At an Opec+ meeting earlier this month, Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman preferred to err on the side of caution rather than bring additional supply to the market.
Crude benchmarks Brent and West Texas Intermediate are trading between 120 per cent and 163 per cent higher than they were a year ago, when the expiry of a previous Opec+ deal sent prices plummeting as producers battled for market share. Brent closed up 1.98 per cent on Friday at $64.53 per barrel. WTI was 2.37 per cent higher at $61.42 per barrel.
Aramco, which acquired 70 per cent of Sabic for $69.1bn in June, is also undertaking a reorganisation of its downstream sector, it said. Sabic is the region's biggest chemicals company.
In line with mounting pressure on fossil fuel businesses to disclose their energy transition efforts, the company said it reached an upstream carbon intensity of 10.5 kilograms of carbon dioxide per barrel of oil equivalent in 2020.
The figure was one of the lowest footprints in the industry, according to the company.
Aramco's methane intensity last year was 0.06 per cent.
Fossil fuel companies are under increasing scrutiny to limit their methane emissions as the gas has a global warming potential that is 84 times greater than that of carbon dioxide.
The company said on Sunday that it is also "well positioned to capitalise on developments in hydrogen".
It plans to ramp up production of blue hydrogen as an alternative energy source to diversify its power mix.