Saudi Arabia's state oil giant, Aramco, announced a decline in net profit for the year 2024, reporting earnings of $106.2 billion. This marks a decrease from the $121.3 billion recorded in 2023, highlighting a challenging year for the company. Aramco shared these financial results on Tuesday, showcasing fluctuations in its dividend payments and the impact on its overall performance.
The base dividend for the fourth quarter of 2024 rose to $21.1 billion, an increase from the $20.3 billion base dividend in the third quarter. However, the performance-linked payout for the fourth quarter stood at a mere $0.2 billion, a stark contrast to the $10.8 billion performance-linked dividend in the previous quarter. This shift indicates a strategic adjustment by Aramco, focusing on maintaining strong base dividends despite a significant reduction in performance-linked payouts.
Aramco's annual net profit decline reflects broader economic conditions and market dynamics that have influenced the oil industry globally. The company's decision to bolster its base dividend while scaling back on performance-linked payouts suggests a move towards stabilizing shareholder returns amidst unpredictable market conditions.
The reduction in net profit and alteration in dividend strategy could be attributed to various factors, including fluctuations in global oil prices and production adjustments. This strategic shift aims to ensure consistent shareholder value, despite facing revenue challenges.