Energy
Monday, March 11th, 2024 3:41 pm EDT
Key Points
- Aramco reported a 25% decline in profit to $121.3 billion in 2023 compared to $161.1 billion in 2022, attributing it to lower crude oil prices, reduced refining and chemicals margins, alongside decreased volumes sold.
- Despite the profit decrease, Aramco increased its base dividend for Q4 by 4% to $20.3 billion and its performance-linked dividend by 9% to $10.8 billion, resulting in a $31 billion payout for the Saudi government and stakeholders.
- The Saudi government transferred an additional 8% of Aramco shares worth $164 billion to the Public Investment Fund (PIF), boosting PIF’s stake to 16% and reinforcing its financial position. Aramco also announced a halt in plans to raise oil production capacity, redirecting focus towards increasing gas production and developing its liquids-to-chemicals business, aiming to ramp up investments in gas infrastructure and other ventures, including the Jaffoura project.
Saudi Arabia’s state-owned oil giant Aramco announced a 25% decrease in profit to $121.3 billion in 2023 compared to $161.1 billion in 2022, attributing the decline to lower crude oil prices and volumes sold, along with reduced refining and chemicals margins. Despite the drop, this still marks Aramco’s second-highest net income on record, surpassing its global peers in profitability. Total revenue also fell by 17% to $440.88 billion, and free cash flow decreased to $101.2 billion in 2023 from $148.5 billion in 2022. Aramco CEO Amin Nasser expressed optimism about the global oil market’s health, projecting growth of about 1.5 million barrels and emphasizing the company’s robust position. The earnings report coincided with the Saudi government’s transfer of an additional 8% of Aramco shares, valued at $164 billion, to the Public Investment Fund (PIF), chaired by Yasir Al-Rumayyan. This transaction, among the largest since Aramco’s listing, aligns with Aramco’s increased dividend payouts, reaching $97.8 billion in 2023, up 30% from the previous year. The PIF’s augmented stake in Aramco, now totaling 16%, enhances its financial standing and advances its goal of reaching $1 trillion in assets under management by 2025. Aramco also announced a halt to plans to expand oil production capacity from 12 to 13 million barrels per day, redirecting focus towards increasing gas production and developing its liquids-to-chemicals business. With investments in ventures like the Jafurah project, aiming to boost gas production by over 60% by 2030, Aramco underscores its commitment to diversifying and strengthening its portfolio beyond crude oil.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/10/aramco-posts-25percent-fall-in-full-year-profit.html
