July 25, 2024
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OIL & GAS

Saudi Aramco Boosts Dividend despite Profit Decline

Saudi Arabia’s state-owned oil giant Aramco has increased its dividend despite a 24.7% decrease in net profit to $121.3 billion in 2023, attributed to lower oil prices and volumes.

According to Reuters, despite the decline, the profit figure marks Aramco’s second-highest on record, the company reported on Sunday, alongside total dividends for the year amounting to $97.8 billion, reflecting a 30% increase. Notably, oil revenues accounted for 62% of total state revenues last year.

Aramco’s generous payouts, which include royalties and taxes, are crucial for the Saudi government, which directly holds approximately 82.2% of the company.

“Our balance sheet remains strong, even after our significant growth programme and dividend payouts,” Chief Executive Amin Nasser said.

Despite the profit dip, Nasser remains optimistic, projecting global oil demand to reach 104 million barrels a day in 2024, up from an average of 102.4 million barrels in 2023.

Aramco has announced a base dividend of $20.3 billion for the fourth quarter, with an additional $43.1 billion expected in performance-linked dividends for the year, including $10.8 billion to be distributed in the first quarter. Both dividends represent increases compared to the previous year.

Despite the profit decline, Aramco’s shares have seen positive movement, trading at around 1.7% higher than their 2019 IPO price.

Reuters reported last month that Saudi Arabia is considering selling more shares of Aramco, but Aramco’s CFO, Ziad Al-Murshed, refrained from commenting on this possibility.

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