DMEA: Luberef profits jump

The net profit of Saudi Aramco Base Oil Co. (Luberef) climbed 21.68% to $240mn during the first half of 2023, with the company’s net profit for the second quarter also rising 3.97% to $121mn compared with $116mn reported the previous year, according to a statement released by the company.

The statement – released to Tadawul – saw Luberef reveal that the rise in profits was driven by higher base oil crack margins and lower zakat and income tax expenses. “Net income increased in the current period (first half) compared to the previous period due to a decrease in zakat and income tax expenses due to Luberef being subjected to zakat only after its listing, in addition to an increase in base oil crack margins despite lower base oil volumes sold,” it read.

In a separate statement, the company also mentioned that its board of directors had approved the implementation of a performance-based dividend policy that would target the distribution of 60% to 80% of Luberef’s annual free cash flow. According to the document, the company aims to pay the dividends on a semi-annual basis.

Luberef recently sold shares owned by a private equity company Jadwa Investment, which saw the company listed on the Tadawul All Share Index in December 2022. The stake had previously been acquired from ExxonMobil in 2007, with Saudi Aramco owning the remaining 70%.