Aramco Maintains $31.1 Billion Dividends

Saudi Arabian Oil Co. (Aramco) on Tuesday declared total dividends for the third quarter of SAR 116.5 billion ($31.1 billion), or SAR 0.4815 per share, maintaining this year’s increased base dividend of $20.3 billion even as debt deepened and oil prices fell.

Aramco reported $27.56 billion in net profit for the July–September period, down from $32.58 billion for the same quarter last year. It rose 0.18 percent in closing price to 27.55 on the Saudi Exchange on Tuesday.

The total dividends’ other portion of $10.8 billion marks Aramco’s sixth distribution of performance-linked dividends it introduced in the third quarter of 2023. For full-year 2024, it expects to declare $124.2 billion in total dividends, as stated in its previous quarterly report.

Aramco pursued more borrowings in 2024. In the third quarter, it raised $3 billion from a two-tranche international sukuk offering. The capital raise, which involved the sale of debt certificates compliant with Islamic religious laws, consisted of $1.5 billion maturing 2029 with a 4.25 percent annual interest and $1.5 billion to be repaid 2034 with a 4.75 percent interest per year. 

Until this year, Aramco had not sold bonds since its last offering in 2021. The offering it announced October 3 is its second in 2024, having raised $6 billion from issuing senior unsecured notes last July.

“Our recent $3.0 billion international sukuk issuance highlighted strong investor confidence in Aramco and we can be proud of the significant strides the Company continues to make, all while sustaining our high levels of profitability, operational performance and reliability”, president and chief executive Amin H. Nasser said Tuesday.

“As we focus on strategic growth opportunities and capturing value through integration and diversification, we intend to maintain our positive momentum and cement our position as a leading global energy and petrochemicals player”.

The company said, “During the quarter, Aramco continued to execute the largest capital program in its history as it invests in unique growth opportunities to seek accretive returns”.

“Capital expenditures for the quarter were SAR 49.6 billion ($13.2 billion), bringing year-to-date capital expenditures to SAR 135.7 billion ($36.2 billion)”, Aramco stated.

The new debts come as the kingdom expects budget deficits to continue, reaching SAR 109 billion ($29 billion) in 2026, according to Saudi Arabia’s 2024 budget statement.

Aramco’s total borrowings stood at $80.92 billion at the end of September, from $77.37 billion at the end of last year. Current borrowings were $13.91 billion as of the end of the third quarter of 2024.

Aramco’s operating activities in the third quarter generated $35.22 billion in cash flow, compared to $31.37 billion for the same period last year. Free cash flow stood at $21.99 billion as of the end of the third quarter of 2024. Cash and cash equivalents were a negative $63.06 billion.

Third quarter 2024 EBIT landed at $51.45 billion. Nine-month EBIT fell $17.58 billion to $160.35 billion “primarily due to lower crude oil volumes sold and weakening refining margins”, Aramco said. “This was partially offset by lower production royalties compared to the same period last year”.

Aramco’s realized crude oil prices averaged $79.3 a barrel, down from $89.3 in the same quarter last year. Third-quarter 2024 production totaled 12.7 million barrels of oil equivalent per day. On January 30 Aramco announced it was reducing its maximum crude output for an extended period to 12 million barrels a day (MMbd), down one MMbd from what it was working on, on the order of the government.

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