Saudi Aramco’s Q2 profits drop 38% to SR113 billion on lower oil prices

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Saudi Gazette report

RIYADH Saudi Aramco announced on Monday that its net profits recorded a decrease of 37.89 percent, reaching SR112.81 billion ($30.1 billion) in the second quarter of 2023, after zakat and tax, while compared to about SR181.64 billion ($48.4 billion) in the same period of 2022. During the first quarter of the current year, oil prices surged to above $100 per barrel after the Russian invasion of Ukraine.

The fall in net profits of the world’s largest oil company in the second quarter was mainly attributed to the drop in crude oil prices. In a filing to the Saudi stock exchange (Tadawul), the company said the substantive decline was due to lower crude oil prices and weakening refining and chemicals margins. “Despite the economic headwinds, we see signals that global demand remains resilient, supported by an ongoing recovery in the aviation sector,” Aramco CEO Amin Nasser said on Monday.

The financial statements of Aramco showed a decrease in net profits after zakat and tax by 19.25 percent to SR119.54 billion ($31.8 billion) in the first quarter of 2023, compared to SR148.03 billion ($39.47 billion) in the same quarter of 2022. On a quarterly basis, Aramco’s profits increased by 3.75 percent in the first quarter of this year, compared to SR115.22 billion in the fourth quarter of 2022.

Aramco also said it intends to distribute performance-linked dividends over coming six quarters, starting with a $9.9 billion distribution in the third quarter. “Our plan to maintain a sustainable and progressive dividend for our shareholders remains intact,” Nasser said.

The company said that in the first quarter of 2023, it paid dividends amounting to SR73.2 billion ($19.5 billion), an increase of four percent over the previous quarter. It also recommended distribution of cash dividends for the second quarter amounting to SR73.2 billion ($19.5 billion) in the third quarter.

The company plans to calculate the first performance-linked dividends based on the combined full-year results of 2022 and 2023. Aramco expects these performance-linked dividends to be calculated based on 70 percent of the group’s combined full-year free cash flow for 2022 and 2023, net of the base dividend and other amounts including external investments.

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