Saudi Aramco’s profits slide to £25bn as world’s largest energy company is dragged down by lower oil prices
The world’s largest oil and gas company Saudi Aramco reported a clear dip in earnings over the first three months of the year, blaming lower global oil prices for reduced profits.
Saudi Aramco unveiled first-quarter profits of £25.3bn – down from the £31.27bn it posted in the same quarter last year.
This follows Aramco claiming the highest-ever recorded annual profit from a publicly listed company last year – earning £127.3bn over the past 12 months.
Those earnings were powered by record energy prices rising after Russia launched its war on Ukraine last February, with sanctions restricting the sale of Moscow’s oil and natural gas in Western markets while the Kremlin throttled key pipelines into Europe.
However, oil prices have sunk in recent weeks – weighed down by intensifying fears of a recession as central banks in the US and elsewhere raise interest rates to try to tame inflation.
Saudi Aramco valued at £1.7 trillion
Despite the slowdown in profits, Aramco stock traded at £7.57 per share on Riyadh’s Tadawul stock exchange at close Monday, giving the oil firm a £1.7tn valuation.
This puts the company only behind Apple and Microsoft for the highest market capitalization in the world.
The Saudi Arabian government owns 90 per cent of Aramco’s stock directly, with a further eight per cent held by the sovereign wealth fund.
Separately, Aramco announced it would start issuing performance-based dividends to stockholders, on top of the dividends it already offers.
Its base dividend in the fourth quarter of last year was £15.5bn.
The company is now targeting capital expenditure of up to £43.6bn for all of 2023.