2023-05-09 06:01:54
Saudi Aramco’s profits declined in the first quarter of this year by 19.25%, to reach 119.5 billion Saudi riyals ($31.88 billion), affected by the decline in oil prices compared to the corresponding quarter of last year, as well as the decline in production, in compliance with the decision of the “OPEC +” coalition led by Saudi Arabia to reduce production. The production of the countries of the group is regarding two million barrels per day, as of the first of last November.
The average forecast by analysts for the results of the first quarter of this year, for the largest oil producing company in the world, indicated a decline in profits by 12.9%, to reach 123.7 billion riyals, according to Bloomberg data.
Aramco’s revenues in the first quarter amounted to 417 billion riyals, compared to 476 billion riyals in the corresponding quarter of last year, a decline of approximately 10.5%.
The decline in revenues came as a result of the decrease in oil prices during the first quarter of this year by more than 5%, or regarding 40%, compared to the highest price achieved by crude in March 2023 with the beginning of the Russian invasion of Ukraine. Saudi Arabia also announced a reduction in oil production within the decision of the “OPEC +” coalition to reduce production. By two million barrels per day, starting from the beginning of last November, before the coalition deepened the reduction in May, in light of the agreement on a voluntary reduction of more than one million barrels per day.
Aramco shares have increased since the beginning of this year by more than 15%, and closed on Monday at 35.8 riyals, while the average analyst expectations for the target price of the company’s share within 12 months is 36.49 riyals, according to Bloomberg data.
The company announced today, Tuesday morning, in a separate statement, the adoption of a new mechanism for distributing quarterly profits to shareholders, linked to performance, in addition to the sustainable basic profits that the company is currently distributing and intends to maintain.
The company aims for these performance-related earnings to reach 50% to 70% of the annual free cash flows of the Saudi Aramco group, following deducting basic dividends and any other amounts, including foreign investments.
investment expenses
Saudi Aramco believes that oil and gas will remain an important part of the global energy mix for the foreseeable future, and the company intends to invest more to seize unique growth opportunities and create long-term shareholder value.
The company indicated that capital expenditures during the first quarter amounted to 32.8 billion Saudi riyals ($8.7 billion), and foreign investments amounted to 9.9 billion riyals.
Dividend
Aramco recommended distributing cash dividends of 73.16 billion riyals ($19.51 billion) to its shareholders for the first quarter, at 0.3 riyals per share, an increase of 4% over the dividends for the same period last year.
The General Assembly of the company approved yesterday, Monday, a capital increase of 15 billion riyals, funded from retained earnings by one free share for every 10 outstanding shares, bringing the company’s capital following the increase to 90 billion riyals.
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