MEOG: Aramco profits drop but dividend kept

Majority state-owned Saudi Aramco reported a Q3 2024 net income of $27.6bn, a 15% decrease from the previous year owing to lower oil prices and refining margins. Despite these challenges, Aramco stuck with its quarterly dividend.

The company’s free cash flow for the quarter was $21.99bn, which did not cover the $31bn needed for its quarterly dividend payout. Economic uncertainties have influenced demand projections, but Aramco anticipates significant energy demand growth in the mid- to long-term, aligning its investments accordingly.

Uncharacteristically, Aramco provided some updates on its oilfield development and maintenance efforts. Aramco said: “the required water injection operation to support the reservoir and crude oil production for the Dammam development project has started as planned.” Progress was also noted in the Marjan and Berri projects, expected to boost production capacity by 300,000 and 250,000 barrels per day, respectively, by 2025. The Zuluf project aims to process 600,000 bpd of crude oil by 2026.

Aramco’s increased capital expenditure underscores its commitment to expanding its portfolio and supporting projects that align with its long-term vision and Saudi Arabia’s Vision 2030 diversification goals. The company has maintained its dividend, crucial for the Saudi budget, despite pressures. The special dividend component, totalling $43bn per year, is expected to decrease in early 2025.