Aramco to Slash Dividends in 2025 Amid Profit Decline and Lower Oil Prices

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  Posted by John Deo Mar 4 - Filed in General - #financialmodelingprep  - 18 views
  

  Saudi oil giant Aramco (TADAWUL:2222) announced on Tuesday that it expects to declare total dividends of $85.4 billion in 2025—nearly 30% less than last year—following a significant drop in profits due to lower sales and rising costs.

  Dividend Decline and Quarterly Payouts

  Aramco’s dividend strategy is taking a hit this year. For the first quarter of 2025, the company declared just $200 million in performance-linked dividends, a stark contrast to last year’s robust quarterly payouts.

  • Last Year’s Dividends: Over $124 billion in total dividends, including about $43.1 billion tied to performance, were paid out.
  • 2025 Outlook: Total dividends are expected to decline sharply, reflecting the current profit pressures.

  Profit Decline and Lower Oil Prices

  The company reported a net profit drop of over 12% to $106.2 billion in 2024. This decline was largely driven by:

  • Lower Revenue: Sales have fallen, impacting overall income.
  • Higher Costs: Operating and financing costs have increased.
  • Oil Price Erosion: Average realized oil prices eased to $80.2 in 2024 from $83.6 in 2023.

  Additionally, Aramco’s net income for the three months ending December 2024 was about $22.34 billion, a nearly 19% drop compared to the same period last year.

  Production and Capacity Utilization

  Since mid-2023, Aramco has been pumping crude at roughly three quarters of its capacity. This operational strategy was part of a broader output reduction announced by Saudi Arabia to manage market conditions, following coordinated cuts with allied producing countries.

  Further Financial Analysis

  Investors interested in a detailed breakdown of Aramco’s performance metrics can refer to Financial Modeling Prep’s suite of APIs for further insights:

  • Key Metrics (TTM): Review essential financial ratios and earnings multiples to understand the impact on Aramco’s profitability.
  • Financial Growth: Analyze revenue and profit trends over time for a comprehensive view of Aramco’s performance.

  Conclusion

  Aramco’s forecast of reduced dividends for 2025 underscores the challenges facing the company amid lower sales and rising operational costs. The drop in net profit and average oil prices reflects broader market pressures, while a deliberate capacity reduction aims to stabilize the market. As Aramco adjusts its payout strategy in response to these headwinds, investors will be watching closely for signs of a turnaround in profitability.

  For further insights into Aramco’s financial health and performance, consider exploring additional data through Financial Modeling Prep’s APIs.