Aramco Profits Tumble 44.6% in Q3
Net income at Saudi Aramco slumped 44.6% year on year in the third quarter to riyals 44.2bn ($11.8bn), the Saudi state oil company reported on November 3, blaming the decline on low prices, production cuts and downstream losses.
Core earnings (Ebit) were also down 42.3%% at riyals 94.5bn, while free cash flow shrank 40% to riyals 46.5bn. Aramco swung to a downstream Ebit loss of riyals 2.98bn in the three months, versus riyals 3bn a year earlier, with the company citing weak margins. But its much larger upstream business performed better, generating riyals 103.7bn in positive Ebit, down 38.1% yr/yr.
"We saw early signs of a recovery in the third quarter due to improved economic activity, despite the headwinds facing global energy markets," Aramco CEO Amin Nasser said in a statement, noting that the company had paid out some $18.75bn in dividends for the third quarter, up from $13.4bn a year earlier.
Aramco produced 12.4mn barrels of oil equivalent/day in the first nine months of this year, including 9.4mn b/d of crude oil. Output was affected by Aramco's commitments under Opec+ cuts that came into force in May. The company did not disclose its average gas extraction over the period, but it reported that gas flow had risen to its highest-ever daily level on August 6 at 10.7bn ft3.
Aramco closed the $69bn purchase in June of a 70% stake in the country's largest petrochemicals producer Sabic, from the kingdom's PIF sovereign wealth fund, as part of efforts to diversify away from crude oil. Sabic returned to profit in the third quarter, following three straight quarterly losses, thanks to impairment reversals, higher prices and increased output.