August 9, 2023 [Proactive]- Subsiding fuel prices saw the world’s largest oil company Saudi Aramco pen a near-40% drop in second-quarter profits on Monday.
Net income came in at US$30.08 billion for the second quarter, a 38% decline from the US$48.44 billion recorded during the same period to June last year.
Free cash flow sat at US$23.16 billion, meanwhile, down 33% on 2022’s figures.
Though the figures mark a drastic year-on-year decline, Saudi Aramco had been among the oil giants to enjoy hiked earnings as fuel prices spiked in the wake of the Ukraine war.
Chief executive Amin H Nasser described the results as showing the company’s “resilience and ability to adapt through market cycles” as a result, with the profits dwarfing rivals’ thanks to its sheer size.
Faltering demand for oil on the back of a worsening economic outlook has weighed into prices so far this year, especially after the significant highs of 2022.
By today’s prices, West Texas Intermediate and Brent crude have fallen 29% and 28% respectively from spikes in May and June last year.
However, Nasser reassured demand remained resilient looking ahead, with an anticipated recovery of the global economy, and the booming aviation sector in particular, set to have an impact.
Despite the faltering results, which echo a normalisation seen across the industry, Saudi Aramco announced a performance-based dividend would be introduced in the next quarter.
This follows a whopping US$19.5 billion awarded to shareholders in the second quarter – five times what Exxon Mobil Corporation (NYSE:XOM) issued in dividend payments during the same period.
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