Members of the media talk before the start of a press conference held by Saudi Aramco at the Dhahran Square Convention Center in Saudi Arabia on November 3, 2019.
Hamad I Mohammed | Reuters
Saudi Arabian oil major Aramco reported second-quarter net profit of US$29.1 billion, a year-on-year decrease Finished As crude oil production remained low, it fell 3% from the same period last year.
Net profit in the first half of this fiscal year was US$56.3 billion, down from US$62 billion in the same period last year. The company also reported second-quarter free cash flow $19 billion, compared with $23.2 billion a year ago.
Saudi Aramco reiterated its second-quarter basic dividend of $20.3 billion and announced a performance-linked dividend of $10.8 billion in the third quarter. The world’s largest oil company expects to pay total dividends of $124.2 billion in 2024.
“We once again delivered market-leading results with strong first-half earnings and cash flow,” Saudi Aramco CEO Amin Nasser said in a company press statement.
“Leveraging these strong earnings, we continue to provide a sustainable and progressive base dividend, as well as a performance-linked dividend that shares earnings with shareholders.”
Many forecasters expect the oil company’s revenue to be essentially flat. Analysts at Riyadh-based brokerage Al Rajhi Capital wrote in a July 22 note that they “expect Saudi Aramco’s second-quarter 2024 revenue to be broadly in line with the same period last year, as compared to the third quarter of 2023.” Compared with the second quarter, the production decline was almost offset by the increase in Brent crude oil prices.”
Continued production cuts
Saudi Arabia’s second-quarter output was 8.99 million barrels per day July OPEC report Cite secondary sources.
The country’s gross domestic product growth has shrunk for four consecutive months, which economists say is largely due to cuts in oil production. According to a report by the Saudi General Authority for Statistics, the overall decline in the second quarter was driven by an 8.5% decline in the Saudi oil industry.
In early June, OPEC+ (an alliance of OPEC and non-OPEC oil-producing countries) agreed to extend joint oil production cuts until 2025 to support oil prices amid weak demand growth. The supply cuts have been in place for nearly two years.
Nonetheless, international benchmarks Brent crude oil Trading prices fell from the mid-$80s to the mid-$70s last month, both prices below what several OPEC members need to balance their budgets. According to International Monetary Fund estimates, Saudi Arabia needs $96 a barrel of Brent crude oil to balance its budget.
