Aramco’s Profit Falls Y-o-Y to 27.6 Billion in Q3

Lower crude oil prices and weakening refinery margins has impacted Aramco, Saudi Arabia’s state-owned energy giant, as its net profit declined over 15% year-on-year (y-o-y) to $27.6 billion, the company said on Tuesday.

Aramco, one of the world’s largest integrated energy and chemicals companies, said that even the total revenue for the quarter, which stood at $111.1 billion, down 2% y-o-y, was mainly due to lower prices of crude oil and refined and chemical products, partially offset by higher volumes sold during the period.

Announcing the financial results for the third quarter of 2024, Aramco reported net income of $27.6 billion as against $32.6 billion in the corresponding quarter of 2023. The cash flow from operating activities were $35.2 billion as against $31.4 billion in Q3 of 2023 and free cash flow stood at $22 billion as against $203. Billion in Q3 of 2023.

The company has declared a base dividend of $20.3 billion for Q3 of 2024 and performance-linked dividend of $10.8 billion declared for distribution in the fourth quarter. 

“The Q3-2024 net income in line with analyst consensus, despite certain non-cash charges of $0.9 billion,” Aramco said.

The company’s capital expenditure rose to $13.2 billion in the third quarter from $11 billion in Q# of 2023, supporting long-term strategic growth. There was a strong demand for $3 billion international sukuk issuance, which further diversified its investor base and enhanced liquidity profile.

The upstream developments enhanced production flexibility and there was progress in gas expansion while renewables program progressed with financial close for three solar PV projects, with anticipated combined capacity of 5.5 GW.

Global LNG Businesses

Aramco also delivered several developments in support of its strategy to expand and develop its gas and global LNG businesses.

The Jafurah Gas Plant, part of the Jafurah unconventional gas field development, continued procurement and construction activities, with phase one expected to commence production in 2025. Production from Jafurah is expected to reach a sustainable sales gas rate of 2 bscfd by 2030, in addition to significant volumes of ethane, NGL, and condensate.

Construction and procurement activities progressed at the Tanajib Gas Plant, part of the Marjan development program. The plant is expected to come on stream by 2025 and add 2.6 bscfd of additional raw gas processing capacity from the Marjan and Zuluf fields.

The Hawiyah Unayzah Gas Reservoir Storage, the first underground natural gas storage in the Kingdom, successfully completed its first full cycle of gas storage and reproduction.

The program can provide up to 2 bscfd of natural gas for reproduction into the Master Gas System based on demand.

Aramco made a further investment in MidOcean to fund MidOcean Energy’s acquisition of an additional 15% interest in Peru LNG (PLNG), increasing MidOcean Energy’s stake in PLNG from 20% to 35%.

Robust Net Income

Aramco President & CEO Amin H. Nasser said that the company delivered robust net income and generated strong free cash flow during the third quarter, despite a lower oil price environment. The company also progressed its upstream developments, strengthened downstream value chain, and advanced its new energies program as the company continued to invest through cycles.

“Our recent $3 billion international sukuk issuance highlighted strong investor confidence in Aramco and we can be proud of the significant strides the Company continues to make, all while sustaining our high levels of profitability, operational performance and reliability,” he said.

“As we focus on strategic growth opportunities and capturing value through integration and diversification, we intend to maintain our positive momentum and cement our position as a leading global energy and petrochemicals player,” he added.