The Saudi Arabian Oil Company (Aramco) has reported a net income of $121.3 billion for 2023, the second-highest in the company’s history.
The company’s net profit dropped by 24.7% to $121.2 from the $161.1 billion Aramco reported in 2022. Oil revenues made up 62% of total state revenues last year, the company revealed in a press release.
Aramco reported total dividends for the year of $97.8 billion, up 30% year-on-year. The company also declared a base dividend of $20.3 billion for the fourth quarter of 2023, to be paid in Q1 2024 and approved the third distribution of performance-linked dividends amounting to $10.8 billion.
“Our balance sheet remains strong, even after our significant growth programme and dividend payouts,” Aramco President and Chief Executive Amin H. Nasser said.“Our resilience and agility contributed to healthy cash flows and high levels of profitability, despite a backdrop of economic headwinds”.
According to Aramco, the company’s results underpinned the company’s unique operational flexibility, reliability and low-cost production base, reflecting its ongoing commitment to creating value for its shareholders.
According to Nasser, the company’s capital expenditures increased “in line with guidance as we seek to create and capture additional value from our operations”, which positions the company “for a future in which we believe oil and gas will be a key part of the global energy mix for many decades to come, alongside new energy solutions”.
During 2023, Aramco’s free cash flow reached $101.2 billion in, compared to $148.5 billion in 2022. The company’s gearing ratio at the end of 2023 was -6.3%, compared to -7.9% at the end of 2022.
Capital investments in 2023 reached $49.7 billion, including $42.2 billion organic capex. This represents a 28% increase from capital investments of $38.8 billion in 2022, including $37.6 billion organic capex. Aramco expects 2024 capital investments to be approximately $48 to $58 billion, growing until around the middle of the decade.
The company expects global oil demand for 2024 to reach an average of 104 million barrels a day, up from an average of 102.4 million barrels in 2023. The directive to maintain maximum sustainable capacity at 12 million barrels per day is expected to reduce capital investment by approximately $40 billion between 2024 and 2028.
Last week, Saudi Arabia announced it had completed the transfer of 8% of Aramco’s total issued shares from the State’s ownership to companies fully owned by the country’s Public Investment Fund (PIF).
Earlier this year, the company allocated an additional $4 billion to its global venture capital arm, Aramco Ventures.
