Saudi Aramco's first-quarter profit falls 4.6%
author: Ann
2025-05-13
On May 11, local time, Saudi Aramco (Saudi Aramco, 2222.SE) released its first quarter 2025 financial report, showing that due to global economic uncertainty and oil price fluctuations, Saudi Aramco's net income for the quarter was US$26 billion, down from US$27.3 billion in the same period last year, a year-on-year decrease of 4.6%. This figure is slightly higher than the average expectation of US$25.36 billion given by 16 analysts. As of 07:54 GMT, Saudi Aramco's share price rose 0.64% to 25.00 riyals, but has fallen 10.9% so far this year.
Saudi Aramco CEO Amin Nasser pointed out in the financial statement: "In the first quarter of 2025, changes in the global trade pattern affected the energy market, and economic uncertainty had an impact on oil prices." He also emphasized that Saudi Aramco's performance demonstrated the value of its low-cost operating model. In turbulent times, the company's resilience supports financial performance and sustainable and increasing basic dividends.
According to the financial report, Saudi Aramco's cash flow from operating activities in the first quarter was US$31.7 billion, and its free cash flow was US$19.2 billion, both lower than the same period last year, and its free cash flow fell by 15.8% year-on-year. The company confirmed a total dividend of US$21.36 billion in the first quarter, of which only US$219 million was performance-linked dividends, a sharp cut of about 98% from last year. This performance-linked dividend mechanism was introduced after Russia's invasion of Ukraine in 2022 caused oil prices to soar.
Saudi Arabia has long relied on Saudi Aramco's generous returns, including royalties and taxes, to drive economic growth. The International Monetary Fund estimates that Saudi Arabia needs an oil price of US$92.3 per barrel this year to balance its budget, while oil revenue accounted for 62% of government revenue last year. Saudi Aramco's declining profits will undoubtedly put more pressure on Saudi Arabia's finances. Monica Malik, chief economist of Abu Dhabi Commercial Bank, said that the sharp drop in oil prices has made the fiscal deficit and the financing prospects of the "2030 Vision" more challenging, and Saudi Aramco's weak profits have been reflected in the widening budget deficit in the first quarter.
Saudi Aramco CEO Amin Nasser pointed out in the financial statement: "In the first quarter of 2025, changes in the global trade pattern affected the energy market, and economic uncertainty had an impact on oil prices." He also emphasized that Saudi Aramco's performance demonstrated the value of its low-cost operating model. In turbulent times, the company's resilience supports financial performance and sustainable and increasing basic dividends.
According to the financial report, Saudi Aramco's cash flow from operating activities in the first quarter was US$31.7 billion, and its free cash flow was US$19.2 billion, both lower than the same period last year, and its free cash flow fell by 15.8% year-on-year. The company confirmed a total dividend of US$21.36 billion in the first quarter, of which only US$219 million was performance-linked dividends, a sharp cut of about 98% from last year. This performance-linked dividend mechanism was introduced after Russia's invasion of Ukraine in 2022 caused oil prices to soar.
Saudi Arabia has long relied on Saudi Aramco's generous returns, including royalties and taxes, to drive economic growth. The International Monetary Fund estimates that Saudi Arabia needs an oil price of US$92.3 per barrel this year to balance its budget, while oil revenue accounted for 62% of government revenue last year. Saudi Aramco's declining profits will undoubtedly put more pressure on Saudi Arabia's finances. Monica Malik, chief economist of Abu Dhabi Commercial Bank, said that the sharp drop in oil prices has made the fiscal deficit and the financing prospects of the "2030 Vision" more challenging, and Saudi Aramco's weak profits have been reflected in the widening budget deficit in the first quarter.
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