Aramco (2222) recorded a 3.4% year-on-year (YoY) decline in the second quarter of 2024. Despite the fall, this exceeds analyst expectations for the period.
This was driven by a decrease in crude oil sales volumes and weak refining margins.
What
The global oil giant recorded a net income of approximately SAR 109 billion (USD 29 billion) during the three months ending on June 30.
This surpassed the average estimate of 15 analysts, which had projected earnings of USD 27.7 billion.
Aramco achieved half-yearly revenues of about SAR 828 billion, with a growth rate of approximately 1%.
However, its net profit fell by about 9% to SAR 211.3 billion in the first half of the year compared to the same period in 2023.
So what
Aramco announced dividends amounting to USD 31.1 billion for the second quarter of the year.
The total distributed amount includes basic dividends of USD 20.28 billion.
Additionally, performance-linked dividends will total USD 10.77 billion.
Remember, the company distributed performance-linked dividends and basic dividends last year.
This is paid-out regardless of the financial results, which is an uncommon practice among listed companies.
It is noteworthy that dividends by the world’s largest oil exporter are critical to the Kingdom’s economy.
This comes at a time when crude prices remain “well below” levels needed to balance the state’s budget, which is expected to witness a deficit for several years.
Some context
The announcement of the results led to a 2.6% increase in Aramco’s share price to SAR 27.5.
However, the stock has fallen 17% this year, lagging behind the performance of big oil companies like ExxonMobil.
Aramco was the “worst performer this year in an index of 21 global oil producers compiled by Bloomberg Intelligence.
Now what
Aramco expects total dividends for 2024 to reach USD 124.2 billion.
This is roughly in line with its previous plans of USD 124.3 billion.
The Saudi government holds about an 81.5% stake in the company.
The Public Investment Fund owns another 16% and benefits from its profits.
