Aramco Reports $106 Billion Profit in 2024 Amid Lower Energy Prices
Saudi Aramco revealed a profit of $106.25 billion for 2024, marking a 12% drop due to lower oil prices. The company faces pressure from rising operating costs and has plans for substantial projects that may increase national debt. Despite these challenges, Aramco is still among the world’s most valuable companies.
Saudi Arabia’s state-owned oil company, Aramco, reported a profit of $106.25 billion in 2024, reflecting a 12% decrease from the previous year due to lower energy prices impacting the nation’s extensive development initiatives. The kingdom, led by Crown Prince Mohammed bin Salman, is committed to ambitious projects like the NEOM city and infrastructure for the upcoming 2034 FIFA World Cup. Such ventures will require significant funding, potentially leading to an increase in national debt.
In its financial statement released on Riyadh’s Tadawul stock exchange, Aramco disclosed revenues of $436 billion for 2024, compared to $440.88 billion in 2023. The company’s annual profit for 2023 stood at $121 billion, a decline attributed to decreased energy prices and rising operating costs. Furthermore, Aramco’s stock value has witnessed a decline, currently trading around $7.33 per share, down from a peak of $8.71 in the past year.
Aramco will distribute dividends amounting to $21.36 billion for the fourth quarter, alongside a reduced performance dividend of $220 million. For 2024, total dividends are projected at $85.4 billion, which signifies a decrease, potentially limiting the funds available for the Saudi monarchy. CEO Amin H. Nasser emphasized the company’s “exceptional resilience” in the face of challenging market conditions.
These financial results emerge amidst OPEC+’s decision to increase oil production by April, the group’s first such increase since 2022. This move is expected to exert further downward pressure on oil prices, a situation that is notably exacerbated by geopolitical issues, including tensions surrounding the Ukraine conflict. Saudi Arabia’s oil extraction costs are among the lowest in the world, with each $10 increment in oil prices resulting in an additional $40 billion in annual revenue for the kingdom.
Saudi Aramco, publicly listed since late 2019, remains majority-owned by the Saudi government. The entity continues to be a crucial economic pillar for the country, sustaining its position as one of the world’s most valuable companies, with a market valuation of approximately $1.74 trillion.
The significant decline in Aramco’s profits highlights the ongoing impact of lower energy prices and the challenges facing Saudi Arabia’s ambitious development plans. As the kingdom navigates these financial difficulties, it is poised to increase debt to fund expansive projects, amidst fluctuating oil markets and geopolitical complexity. The results underline both the challenges and the resilience of Aramco as it maintains its critical role in the global energy sector.
Original Source: apnews.com
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