Aramco announced a net income of $27.6 billion for the three months ending September 30, exceeding the company-provided median estimate of $26.9 billion. It also surpassed Citi’s forecast of $26.3 billion in a research note issued in October.
Meanwhile, Aramco recorded a 15.4% decline in its third-quarter profit due to lower crude prices and reduced refining margins. Despite this, the company maintained its dividend at $31.1 billion for the quarter.
The dividend includes a performance-linked payout of $10.8 billion, which Aramco introduced last year following record profits in 2022. It combines a base dividend with performance-linked dividends, which is relatively uncommon among listed companies.
Aramco anticipates total dividends of $124.3 billion for 2024, with $43.1 billion expected to be performance-linked dividends.
The Saudi government, which directly holds nearly 81.5% of Aramco, relies heavily on the company’s dividends, along with royalties and taxes. The sovereign Public Investment Fund (PIF), which owns an additional 16% of Aramco, also benefits from these dividends.
Saudi Arabia, as the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC), is currently producing about 9 million barrels per day, about three-quarters of its capacity.
Lower output and prices have pressured state finances. A preliminary budget statement in late September showed that Saudi Arabia expects to post a fiscal deficit of 118 billion riyals ($32 billion) this year, equal to 2.9% of GDP, wider than the 79 billion riyals expected in the 2024 budget statement in December.
To address its financing needs, the government sold additional Aramco shares earlier this year, raising $12.35 billion. Saudi Arabia was the largest debt issuer among emerging markets in the first half of the year, according to Reuters.
Saudi total public debt reached nearly 1.15 trillion riyals ($306.17 billion) at the end of June, up 9.4% from a year earlier. Public debt is expected to rise to 1.172 trillion riyals by year-end, exceeding a previous estimate of 1.103 trillion riyals.
