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Saudi energy major Aramco posted a 14% year-on-year (YoY) fall in Q1 2024 net profit to 102.27 billion Saudi riyals ($27.27 billion), from $31.9 billion a year ago , on lower volumes of crude sold, weakening refining and chemicals margins, and lower other income.
The net profit was in line with analysts' mean estimate of $27.23 billion, according to LSEG data.
Q1 revenue was 4% lower YoY at $107.21 billion, versus an estimate of $108.68 billion.
In a regulatory filing on Tadawul on Tuesday, the integrated oil and gas company said it expects total dividends of $124.3 billion to be declared in 2024.
Aramco President and CEO Amin H. Nasser said the company continues to execute "our long-term strategy and in the first quarter made significant progress on expanding our gas business and growing our globally-integrated downstream value chain, while maintaining our focus on consistently delivering value for our shareholders."
“Looking ahead, I expect our portfolio to continue to evolve as we aim to contribute to an energy transition that offers solutions to climate challenges, but at the same time recognizes the need for affordable, reliable, and flexible energy supplies,” he added.
The world’s biggest oil company, in which the Saudi Arabian government has an 82% stake, achieved total hydrocarbon production of 12.4 million barrels of oil equivalent per day (MMBOED) in the first quarter.
During the period, the crude oil utilized by Aramco’s downstream operations accounted for 51% of the Aramco’s crude oil production.
Free cash flow for Q1 was $22.8 billion, compared to $30.9 for the same quarter in 2023, marking a decrease of $8 billion.
This drop largely reflects "lower operating cash flows as a result of lower earnings and unfavourable movements in working capital, partially offset by a reduction in cash paid for the settlement of income, zakat and other taxes," the statement said.
Capital expenditure in Q1 was $10.83 billion, up from $8.75 billion in the year-ago period, as the company looked to expand crude and gas production.
In January this year, the Saudi government directed Aramco to maintain its Maximum Sustainable Capacity (MSC) at 12 million barrels per day (MMBD), and not to continue increasing MSC to 13 MMBD. The company said at that time that the suspension is likely to reduce its capital investments by about $40 billion between this year and 2028.
In Tuesday's statement, Aramco said the directive will have no impact on announced, nearterm projects including the Dammam development and the Marjan, Berri, and Zuluf crude oil increments. Production from these projects will be used to maintain MSC at 12 MMBD.
On Sunday, the Saudi government posted a budget deficit of $3.30 billion for Q1 2024--the sixth straight quarterly budget deficit--as higher spending and lower oil revenues weighed.
(Reporting by Brinda Darasha; editing by Seban Scaria)
