Aramco expects sharp drop in 2025 dividends as 2024 profit falls – Business

Saudi oil giant Aramco said on Tuesday that it expects to declare total dividends of $85.4 billion in 2025, a near 30 per cent drop from payouts in 2024 as it faced lower sales and higher costs.

Aramco paid about $124.25bn in dividends in 2024 and had $97.78bn in payouts in 2023.

Aramco is the chief source of revenue for Crown Prince Mohammed bin Salman’s Vision 2030 reform agenda, which aims to remodel the Gulf kingdom’s crude-reliant economy.

Soaring energy prices following Russia’s invasion of Ukraine allowed Aramco to post record profits in 2022, before they dipped by 25pc in 2023.

In an attempt to prop up prices, Aramco slashed production by 500,000 barrels per day in April 2023 as part of a joint move with the OPEC+ oil producers’ alliance.

Aramco followed up with a further cut of one million bpd in June 2023, agreeing last December with other OPEC+ countries to extend the supply cut until March.

Aramco’s dividends for 2024 included about $43.1bnin performance-linked dividends, a mechanism introduced in 2023 on top of base dividends that are paid regardless of results.

The company declared $200m in performance-linked dividends to be paid in the first quarter of 2025, a steep decline from the nearly $10.8bn declared for each quarter of 2024.

Aramco reported a net profit of $106.2bn in 2024, down from $121.3bn in 2023.

“The decrease was primarily driven by lower revenue and other income related to sales, higher operating costs, as well as lower finance and other income. This was partially offset by lower income taxes and zakat,” Aramco said in a stock exchange filing. ($1 = 3.7503 riyals)