Saudi Arabian Oil Co reported net profit of SR119.54 billion

Saudi Arabian Oil Co. has reported a net profit of SR119.54 billion ($31.88 billion) in the first quarter of 2023, up 3.75 percent from SR115.22 billion recorded in the previous quarter.

In a statement to Tadawul, Saudi Aramco said that the rise in quarter-on-quarter net profit was driven by lower income taxes and zakat, lower operating costs, and higher finance and other income.

“The results reflect Aramco’s continued high reliability, focus on cost and our ability to react to market conditions as we generate strong cash flows and further strengthen the balance sheet,” said Amin Nasser, CEO of Saudi Aramco.

Aramco’s net profit, however, dipped 19.25 percent year-on-year in the first quarter, as the company had clocked a profit of SR148.03 billion in the same quarter of 2022.

Nasser further noted that oil and gas supplies are very critical components as the world sails toward a sustainable future. He asserted that Aramco is working hard to develop sustainable energy solutions that will smoothen the energy transition journey.

“Our intention is to continue to be a reliable energy supplier with the ability to provide more sustainable energy solutions, supporting efforts to achieve an orderly energy transition. By working to further reduce the carbon footprint of our operations and adding new lower-carbon energy options to our portfolio, I am confident about the contributions we will make,” added Nasser.

Meanwhile, Aramco is also planning to introduce a mechanism for performance-linked dividends on a quarterly basis in addition to the base dividends it currently distributes.

According to the statement, Aramco intends to target such performance-linked dividends to be in the amount of 50 percent to 70 percent of the group’s annual free cash flow, net of the base dividend and other amounts including external investments, to be determined with the annual results.

The statement added that the dividend of $19.5 billion in the first quarter of 2023 will be paid in the second quarter.

Shareholders of Aramco also approved the board’s recommendation to increase the company’s capital to SR90 billion from SR70 billion.

According to the Tadawul statement, the capital increase will be done through the capitalization of SR15 billion from retained earnings. It added that the energy giant would distribute one bonus share for every 10 shares held.