Aramco Posts Decline in Q2 Profit

Saudi Aramco reported a net income of $29 billion for the second quarter of the year, down from $30 billion a year earlier. Half-year profits this year were also slightly lower than the 2023 result.

Free cash flow also shrank, from $23.1 billion in the second quarter of 2023 to $18.96 billion in the second quarter of this year. Dividends paid, however, were ramped up from $19.5 billion last year, to $31 billion this year.

“We have delivered market-leading performance once again, with strong earnings and cash flows in the first half of the year. Leveraging these strong earnings, we continued to deliver a base dividend that is sustainable and progressive, and a performance-linked dividend that shares the upside with our shareholders,” chief executive Amin Nasser said.

The company’s release also noted its natural gas pivot, seeing to boost gas production and sales by 60% by 2030 from 2021 levels.

The biggest shareholder of the company is, of course, the Saudi state, which has a stake of over 81% and could definitely use the bumper dividends as it struggles to stay on course with a massively ambitious economic diversification program that will cost hundreds of billions. In addition to its direct stake, the Saudi government also holds 16% in Aramco via its sovereign wealth fund, the Public Investment Fund.

To help fund that program, Aramco placed a secondary share offering earlier this year, raising over $12 billion from the sale as it priced the issue at the lower end of the original range. Half of the stock purchases came from abroad.

The Saudi state energy major also placed a bond offering this year, for the first time since 2021. The size of the offering was $6 billion but Aramco secured orders worth $31 billion for the debt issue.

By Irina Slav for Oilprice.com

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