Saudi Aramco reports 15% drop in Q3 profit, maintains dividend

Image credit: Saudi Aramco

Saudi oil giant Aramco on Tuesday reported a 15.4 per cent drop in third-quarter profit due to lower crude prices and weaker refining margins, but maintained its generous dividend at $31.1bn for the quarter.

Aramco posted net income of $27.6bn in the three months to September 30, which still beat a company-provided median estimate of $26.9bn.

Citi had forecast a net income of $26.3bn in a research note in October.

The dividend includes $10.8bn in performance-linked payouts. Aramco introduced performance-linked dividends last year after bumper profits in 2022 when oil prices soared, on top of a base dividend that is paid regardless of results – uncommon among listed companies.

Aramco has said it expects to declare total dividends of $124.3bn in 2024, of which $43.1bn would be performance-linked dividends.

The Saudi government, which directly holds nearly 81.5 per cent of Aramco, relies heavily on the company’s payouts, which also include royalties and taxes. Its sovereign Public Investment Fund (PIF) holds another 16 per cent of Aramco and also benefits from its dividends.

The PIF, which manages roughly $925bn in assets, is steering a sprawling economic agenda known as Vision 2030 to reduce the kingdom’s reliance on oil. The plan has ploughed vast sums into everything from sports and electric cars to planned futuristic desert cities.

Reuters has reported the PIF is weighing a reorganisation that includes reprioritising projects and reviewing some expenses after Finance Minister Mohammed Al Jadaan said earlier this year that Vision 2030 will be “adjusted as needed,” with some projects scaled back or extended and others accelerated.

Saudi Arabia, de facto leader of the Organization of the Petroleum Exporting Countries, is pumping roughly 9 million barrels per day, about three-quarters of its capacity, after agreeing cuts with OPEC members and allies, including Russia.

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