Saudi Aramco Q2 profit down 38% to 112.81 billion riyals

SAUDI Arabian state oil giant Aramco reported on Monday (Aug 7) a near 38 per cent drop in second-quarter net profit on the back of weaker oil prices and thinner refining and chemicals margins.

Aramco’s net profit fell to 112.81 billion riyals (S$40.3 billion) for the quarter to June 30 from 181.64 billion riyals a year earlier, it said in a statement, beating a company-provided median estimate from 15 analysts of US$29.8 billion.

The group declared a base dividend of just over US$19.51 billion for the second quarter, roughly in line with its payout for the first quarter.

It also said it will begin paying performance-linked dividends for six quarters, starting with a US$9.87 billion payout in the third quarter.

Most oil majors reported strong or record-breaking earnings in the second quarter of 2022 after Western sanctions against major exporter Russia squeezed an already undersupplied global market, causing a surge in crude and natural gas prices.

Brent has dropped from US$113 a barrel a year ago, hit by concerns of an economic slowdown and ample supplies, though Moscow and Riyadh have been trying to prop up prices.

Oil futures are now at their highest since mid-April after Saudi Arabia and Russia pledged to keep supplies down for another month to tighten global markets further. Brent was trading around US$86 a barrel on Monday.

Opec+, which groups the de facto Saudi-led Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40 per cent of the world’s crude. The group has been limiting supply since late last year to bolster the market.

“At Aramco, our mid to long-term view remains unchanged. With a recovery anticipated in the broader global economy, along with increased activity in the aviation sector, ongoing investments in energy projects will be necessary to safeguard energy security,” CEO Amin Nasser said in a statement.

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Aramco’s shares, which were little changed on Monday, have risen about 10.7 per cent this year to 32.3 riyals. REUTERS