Logo of Aramco, officially the Saudi Arabian Oil Group, Saudi petroleum and natural gas company, seen on the second day of the 24th World Petroleum Congress at the Big 4 Building at Stampede Park, on September 18, 2023, in Calgary, Canada.
Artur Widak | Nurphoto | Getty Images
Saudi Arabia’s state oil giant Aramco reported a 25% decline in profit to $121.3 billion in 2023, down from $161.1 billion in 2022.
“The year-on-year decrease can be attributed to lower crude oil prices and volumes sold, as well as reduced refining and chemicals margins, partially offset by a decrease in production royalties during the year and lower income taxes and zakat,” Aramco said in a statement.
Aramco said total revenue also fell 17% to $440.88 billion, down from $535.19 billion last year.
The result still represents Aramco’s second-highest ever net income. Free cash flow also fell to $101.2 billion in 2023, compared to $148.5 billion in 2022.
“Our resilience and agility contributed to healthy cash flows and high levels of profitability, despite a backdrop of economic headwinds,” Aramco CEO Amin Nasser said.
Changing Hands
The earnings come after the Saudi government transferred an additional 8% of Aramco shares, worth $164 billion, to Saudi Arabia’s Public Investment Fund (PIF). Yasir Al-Rumayyan is both the Chairman of Aramco’s Board of Directors and the Governor of the PIF.
The share transfer to PIF is one of the largest transactions Aramco has undertaken since listing, and will allow the PIF to benefit from Aramco’s mega dividend payout policy. PIF already owned 4% of Aramco, and controls Sanabil, a financial investment firm, which owns 4% of Aramco as well.
Aramco said total dividends of $97.8 billion were paid in 2023, up 30% from 2022. It declared a base dividend of $20.3 billion for the fourth quarter, to be paid in the first quarter of 2024. Aramco also pays performance-linked dividends, worth $10.8 billion in 2023. The full year performance-linked dividend to be paid in 2024 is expected to be $43.1 billion.
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