Saudi Aramco, the massive oil company that is largely owned by the government of Saudi Arabia, has announced that it is slashing its dividend payout this year by 30%.
The dividend cut comes as the crude producer reported a 12% decline in its net profit to $106.20 billion U.S. in 2024 from $121.30 billion U.S. in 2023.
As a result, the company is reducing its expected 2025 dividend payments to $85.40 billion U.S., a 31% decrease from 2024's payout of $124.20 billion U.S.
Saudi Aramco also reduced its dividend payment for the fourth quarter of 2024, saying it plans to pay a base dividend of $21.10 billion U.S., plus a performance payout of $200 million U.S.
That’s down significantly from a third-quarter 2024 base dividend of $20.30 billion U.S. and a performance dividend of $10.80 billion U.S.
The company blamed slumping oil prices for the decline in net profits and the dividend cut, saying that while crude production around the world has increased, demand has slowed.
Saudi Amarco said its realized oil price, which is the price the company receives for selling its crude oil after transportation and other costs, fell to $80.20 U.S. per barrel in 2024 from $83.60 U.S. the previous year.
Aramco’s dividend, the highest shareholder payout in the world, is critically important to Saudi Arabia’s state coffers and budget.
The announced dividend cut is expected to impact Saudi Arabia’s budget deficit, which has been widening amid weak oil prices and rising state spending.
Saudi Aramco’s revenue fell to $436.60 billion U.S. in 2024, down from $440.80 billion U.S. the year before.
The company’s stock trades on the local Saudi exchange. In percentage terms, its share price has declined 14% over the past year.
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