Energy
Tuesday, May 7th, 2024 2:14 pm EDT
Key Points
- Saudi Aramco’s first-quarter net profit fell 14% year-on-year to $27.3 billion, down from $31.9 billion in the same period last year, due to lower oil prices and production levels.34
- The company’s net income for Q1 2024 was in line with analyst expectations, according to Reuters.34
- Despite the decline in net profit, Aramco announced a total dividend of $31 billion for Q1 2024, comprising a $20.3 billion base dividend and a $10.8 billion performance-linked dividend to be paid in Q2.
Saudi Aramco, the world’s largest oil exporter, reported a 14% year-on-year decline in its first-quarter net profit, primarily driven by lower oil prices and reduced production levels. The state-owned oil giant’s net income for the three months ending March 31, 2024, stood at $27.3 billion, a decrease from the $31.9 billion recorded in the same period last year.1234Despite the drop in net profit, the figure aligned with analyst expectations, as reported by Reuters. Aramco’s financial performance during the quarter was impacted by the broader market conditions, with oil prices and sales volumes experiencing a downturn.1234While net income took a hit, Aramco maintained its commitment to delivering substantial dividends to the Saudi government and other shareholders. The company announced a total dividend payout of $31 billion for the first quarter, comprising a base dividend of $20.3 billion and an additional “fourth performance-linked dividend distribution of $10.8 billion,” which will be paid in the second quarter.1234Aramco’s free cash flow for the quarter stood at $22.8 billion, a decrease from the $30.9 billion reported in the first quarter of 2023. Similarly, cash flow from operating activities declined to $33.6 billion, compared to $39.6 billion in the previous year.123Looking ahead, the oil giant expects total dividends of $124.3 billion to be declared throughout 2024, reaffirming its commitment to delivering value to its shareholders and the Saudi government.1234Despite the challenges posed by market conditions, Aramco has continued to invest substantially in expanding its operations and diversifying its portfolio. The company has focused on growing its downstream operations and gas discovery and production capabilities, positioning itself for long-term growth and value creation.1234Amin Nasser, Aramco’s President and CEO, highlighted the company’s progress in executing its long-term strategy, stating, “We also continue to execute our long-term strategy, and in the first quarter made significant progress on expanding our gas business and growing our globally-integrated downstream value chain, while maintaining our focus on consistently delivering value for our shareholders.”1234While the first-quarter results reflected the impact of lower oil prices and production levels, Aramco’s resilience and commitment to shareholder value were evident in its substantial dividend payments and ongoing investments in strategic growth areas. As the global energy landscape evolves, the company’s ability to adapt and capitalize on emerging opportunities will be crucial in maintaining its position as a leading player in the industry.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/07/saudi-aramco-upholds-dividend-despite-drop-in-first-quarter-profits.html
