12 March 2024 , 15:15
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Saudi oil giant Aramco has revealed a profit of $121 billion last year, which is less than the record set in 2022.
This is due to lower energy prices. Despite this, it's still the company's second highest result ever, according to Aramco. This comes as members of the OPEC+ alliance are cutting their production to try and increase global energy prices.
However, these lower results also put pressure on the kingdom as it starts a huge development project under its assertive crown prince to reduce its reliance on oil revenues. In 2022, Aramco reported a profit of $161 billion, which is likely the biggest ever reported by a publicly traded company.
"The decrease mainly reflects the impact of lower crude oil prices and lower volumes sold, and weakening refining and chemicals margins," the company said in its filing to the Tadawul stock market.
Even though profits were lower this year, Aramco increased the dividends for its stock holders to over $31 billion in the fourth quarter, according to filings. Aramco reported overall revenue of $440 billion last year, down from $535 billion in 2022.
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"Our resilience and agility contributed to healthy cash flows and high levels of profitability, despite a backdrop of economic headwinds," said Aramco CEO Amin H. Nasser in a statement.
Aramco, also known as the Saudi Arabian Oil Co. , has reported its output at 12.8 million barrels of oil a day. The Saudi government has told the company to keep production at this level, even though they had plans to increase it.
Saudi Arabia, a big player in the OPEC group, has teamed up with Russia and other countries outside the group to try and keep oil production low to help global oil prices rise. On Sunday, Brent crude oil was trading for less than $82 a barrel.
Aramco is worth $2 trillion, making it the fourth most valuable company in the world, after Apple, Microsoft and NVIDIA. On Sunday, Aramco's shares were slightly up on the Tadawul stock market, at $8.64 a share.
Saudi Arabia's huge oil resources, which are close to the surface of its desert, make it one of the cheapest places in the world to produce oil. Crown Prince Mohammed bin Salman wants to use the money from oil to help the country move away from relying on oil sales.
He has plans for a futuristic desert city called Neom, which will cost $500 billion, among other projects. However, some people have criticised the profits because of worries about how burning fossil fuels is speeding up climate change.
On Thursday, Prince Mohammed gave another 8% of Aramco shares to the country's important sovereign wealth fund, which is worth over $160 billion. Most of the company is still owned by the Al Saud Royal family, with a small amount traded on the Tadawul stock market.