DUBAI: Saudi Aramco reported a 15.4% decline in third-quarter profit, with net income at $27.6 billion, impacted by lower crude prices and reduced refining margins. Despite the profit dip, the oil giant maintained its substantial dividend at $31.1 billion for the quarter, including $10.8 billion in performance-linked payouts.
This third-quarter performance surpassed analysts’ estimates, including Citi’s projection of $26.3 billion. Aramco’s dividend policy combines performance-linked payouts with a base dividend, ensuring steady returns even when earnings fluctuate.
The Saudi government, directly holding 81.5% of Aramco, relies on these dividends, along with royalties and taxes, as critical revenue sources. The Public Investment Fund (PIF), which owns an additional 16%, also benefits as it drives Vision 2030—a strategic plan to diversify the kingdom’s economy away from oil dependency. However, Vision 2030’s projects are under review for potential reprioritization.
With Saudi oil production capped at approximately 9 million barrels per day due to OPEC+ agreements, and Brent crude trading around $75 per barrel, fiscal pressures have increased. A widening budget deficit of 118 billion riyals ($32 billion) is projected for 2023, leading to increased borrowing. The Saudi government and Aramco have raised substantial funds, including a $12.35 billion Aramco share sale earlier this year, to meet the kingdom’s fiscal needs.
