Saudi Aramco on Tuesday reported a 23% fall in third-quarter net profit on the back of lower oil prices and volumes sold, marginally beating analyst estimates and helping prop up its shares in early trade.
Aramco issued the results of the third quarter of 2023, which show that the company's net income amounted to SAR122.2 billion ($32.6 billion) in the period, compared to SAR159.1 billion ($42.4 billion) in Q3 of 2022.
Cash flow from operating activities amounted to SAR117.6 billion ($31.4 billion) in Q3 of 2023, compared to SAR202.5 billion ($54.0 billion) in Q3 of 2022, and free cash flows1 reached SAR76.3 billion ($20.3 billion) in Q3 of 2023, compared to SAR168.6 billion ($45.0 billion) in Q3 of 2022.
The gearing ratio1 reached -7.6% on September 30, 2023, compared to -7.9% at the end of 2022, the Q2 of 2023 base dividend of SAR73.2 billion ($19.5 billion) was paid in the third quarter, and the Q3 of 2023 base dividend of SAR73.2 billion ($19.5 billion) will be paid in Q4.
The report also shows that the first performance-linked dividend distribution of SAR37.0 billion ($9.9 billion) was paid in Q3, and the second distribution of SAR37.0 billion ($9.9 billion) will be paid in Q4, based on the combined full-year 2022 and nine-month 2023 results.
The company's strategic expansion continues with agreement on the first international liquefied natural gas (LNG) investment; the company plans to enter South American market through a downstream retail acquisition.
The report shows that Saudi Aramco increases raw gas processing capacity by 800 million standard cubic feet per day (mmscfd), including approximately 750 mmscfd of sales gas processing capacity, through Hawiyah Gas Plant expansion, and that the collaboration with Stellantis indicates eFuel compatibility with 24 engine families in Europe.
In a press statement, Aramco President and CEO Amin H. Nasser said: "Our robust financial results reinforce Aramco’s ability to generate consistent value for our shareholders, and we continue to identify new opportunities to evolve our business and meet the needs of customers."
He added that during the third quarter, Aramco agreed to make its first international investment in liquefied natural gas (LNG) to capitalize on rising LNG demand, and announced its intention to enter the South American retail market. These planned investments, Nasser said, demonstrate the scale of "our ambition, the broad scope of our activities, and the disciplined execution of our strategy".
He added that the company's progress will "complement both our upstream capacity expansion and our growing downstream presence."
Nasser reiterated Aramco's intention to continue investing across the hydrocarbon chain, "leveraging cutting-edge technologies to optimize operations and advance the development of emerging energy solutions."
"It is an approach rooted in the company's belief that a balanced and realistic energy transition plan should consider the needs of all geographies to avoid disparities between global energy consumers," he said.
