Saudi Aramco’s profit dropped by 11% in nine months due to ‘lower crude oil prices’

Saudi Arabian Oil Company (Aramco) says its net income dropped by 11 percent to $83.9 billion in nine months, compared to $94.5 billion in the corresponding period.

Saudi Aramco, in its third quarter (Q3) 2024 financial results released recently, also said it recorded $27.6 billion in the quarter under review as net income.

The figure represents a decline of 15.3 percent or $5 billion compared to the $32.6 billion recorded in the same quarter in 2023.

According to Aramco, the decrease experienced was primarily due to the impact of lower crude oil prices and weakening refining margins. 

“This was partially offset by a reduction in selling, administrative and general expenses primarily driven by a gain from derivative instruments, and a decrease in production royalties largely reflecting lower crude oil prices and a lower average effective royalty rate compared to the same quarter last year,” Aramco said.

It also declared a third-quarter dividend of $20.3 billion — to be paid in the fourth quarter of 2024.

According to the financial statement, the oil company’s capital expenditure increased by 19 percent to $13.2 billion in the third quarter – up from $11 billion in Q3 last year.

The increase, Aramco said is largely due to advancements in crude oil increments and increased development activity to support the strategic expansion of the company’s gas business.

Commenting on the results, Amin H. Nasser, Aramco’s president and chief executive officer (CEO), said the company is focused on strategic growth. 

“Aramco delivered robust net income and generated strong free cash flow during the third quarter, despite a lower oil price environment,” Nasser said. 

“We also progressed our upstream developments, strengthened our downstream value chain, and advanced our new energies program as we continue to invest through cycles. 

“Our recent $3.0 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.

“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.”

Saudi Aramco went public in December 2019 after raising a record $25.6 billion by selling three billion shares.