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State-owned Saudi Aramco raised its dividend even as profits fell in 2023 to $121 billion – down from a record $161 billion set in 2022 – as falling oil prices and government-led production cuts State have weighed on the performance.
The energy group said net profit in the final three months of the year was in line with analysts’ average estimates of $26.7 billion. Although the full-year figure was down 24.7% compared to 2022, profits still exceeded the $111 billion reported in 2021, making them the second highest ever.
Saudi Aramco said it will increase its quarterly dividend payment by 4% year-on-year to $20.3 billion and pay an additional performance-linked dividend of $10.8 billion. The company introduced the performance dividend in the second quarter of last year to boost returns for shareholders, particularly the state and the Saudi sovereign wealth fund, which own 82% and 16% of the company, respectively.
Aramco’s total dividends for the year increased 30% from 2022 to $97.8 billion.
The payment remains the most important source of revenue for Crown Prince Mohammed bin Salman, who wants to use oil profits to finance an ambitious program to modernize the kingdom and diversify the economy.
The company’s total capital spending in 2023 was $49.7 billion, up from $37.6 billion in 2022. Free cash flow from operations was $101 billion, up from $148 .5 billion dollars in 2022 and 107.5 billion dollars in 2021.
Saudi Aramco said it produced an average of 12.8 million barrels per day of crude oil and other liquids last year, up from 11.5 million barrels per day in 2022.
Saudi Arabia has cut its oil production by about 2 million barrels a day over the past 18 months, through a series of cuts with other OPEC+ members, in a bid to support prices. Last month it abandoned a multibillion-dollar investment program to further increase its maximum production capacity to 13 million barrels a day by 2027.