Saudi Arabia's major oil and gas company, Aramco(SAU:2223, Financial), posted 15% lower profits for the July-September quarter at $27.5bn due to a slump in oil prices and refining margins. This trend is indicative of other market trends in the global oil market, where the benchmark Brent crude has been floating around 75 dollars per barrel thanks to fading Middle East tensions and a slowing Chinese economy.
While the company's quarterly profits fell to $32.5bln from $34.8bln a year ago, its revenues remained healthy at $111.1bln, slightly lower than $113 billion from the same period of the previous financial year. It's reported that the company's profit in the first nine months of 2024 declined to $83.9bn, down from $94.5bn the previous year.
Aramco said that for the third quarter, it would pay dividends of $20.28bn and a performance-linked cash reward of $10.77bn to shareholders, targeting an annual dividend above $124bn. The company's dividend is central to its contribution to the Saudi Arabian economy, specifically through maximizing government spending for the royal family Al Saud, which owns the majority of shares in Aramco.
Aramco shares floated on Riyadh's Tadawul stock market were trading at $7.31 each from a high of over $9 in 2019. Investors adjusted the company's value to the new benchmark of $1.7 trillion based on lower oil prices, helping place Aramco as the sixth most valuable organization in the world.
While focusing on its hierarchical system, Saudi Arabia, led by Crown Prince Mohammed bin Salman, is scaling back some of its grand initiatives, such as the $500 billion Neom City, due to possible budget shortfalls occasioned by changes in its major source of revenue oil.
