Saudi Aramco to Return $31 Billion to Shareholders, Government After Profit Beat — Update

By Christian Moess Laursen

Saudi Aramco said its second-quarter net profit beat market estimates, and that it plans to pay $31.05 billion in dividends to the Saudi government and its shareholders.

Saudi Arabia's national oil company on Tuesday posted a quarterly net profit of $29.07 billion, down from the $30.83 billion it reported for the same period last year.

The result was higher than the $27.7 billion the market had forecast, according to a median estimate provided by the company. Earnings were driven by robust crude-oil prices, offsetting lower crude oil volumes sold and weaker refining margins on year.

"Our strong results reflect our resilience and ability to adapt through market cycles," Chief Executive Amin H. Nasser said.

Crude-oil prices improved from the first quarter due to easing inflationary pressure, strong seasonal growth and falling oil inventories, the company said.

Aramco, one of the most valuable companies globally, declared a base dividend of $20.28 billion for the second quarter and a performance-linked dividend of $10.77 billion.

Saudi Arabia--the world's biggest oil exporter--relies heavily on Aramco's payouts to fund the kingdom's megaprojects, which include a state-of-the-art city being built in the desert and a global airline, and to rapidly diversify its economy beyond oil.

The government additionally raised $12.35 billion in an Aramco stock sale in June to fuel these ambitions as well as investment in new energy industries under its Vision 2030 plan.

Aramco aims to expand its global portfolio of liquefied natural gas, or LNG. This year it has signed a number of agreements with producers of the superchilled gas, including with Texas' NextDecade and California-based Sempra.

Aramco said it sees strong demand-led growth for LNG as the world continues its energy transition, with gas being a vital fuel and feedstock in various industries.

The fossil-fuel giant reaffirmed that it expects to declare a total of $124 billion in dividends for the year.

Most global oil majors booked second-quarter profits that were higher than market watchers had forecast. Exxon Mobil, Shell and BP all beat expectations, with the U.S. major recording one of its highest-ever second-quarter profits thanks to record output. Chevron, meanwhile, performed below expectations as downstream earnings were hit by weaker refining margins.

Aramco reported a quarterly hydrocarbon output of 12.3 million oil-equivalent barrels, an 8.9% decline from last year.

Cash flow from operations--another closely-watched metric--declined to $31.09 billion from $33.62 billion.

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

August 06, 2024 02:49 ET (06:49 GMT)

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