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Yahoo
5 days ago
- Business
- Yahoo
Saudi Aramco profit drops as it flags cost cuts, divestments
By Yousef Saba and Luke Tyson DUBAI (Reuters) -Saudi Arabian oil company Aramco reported a 22% drop in second-quarter profit on Tuesday, and the world's top oil exporter said it was cutting costs and looking to divest assets as crude prices drop and its debt mounts. The firm's generous dividends, a key source of funding for ambitious plans to cut the kingdom's reliance on oil, will be about a third lower this year. Aramco reported its 10th decline in quarterly net profit to $22.7 billion in the quarter through June, from $29.1 billion a year earlier. Aramco's shares were up 0.3% at 23.98 riyals. They have dropped about 14.5% this year, trailing industry peers. Adjusted net income fell 13.7% to $24.5 billion, above a company-provided median analyst estimate of $23.7 billion. "What we're looking at across the portfolio is to unlock capital that is currently locked into low - relatively low-return (assets) ... invest it in our core investment, which are high return," CFO Ziad Al-Murshed told reporters. He declined to name the assets, but said: "it is your typical low-return that is tied in things like infrastructure." Reuters reported last month that Aramco was close to a deal to raise $10 billion from a group led by BlackRock, and is considering selling up to five gas-powered power plants to raise up to $4 billion. Total borrowing rose to $92.9 billion at June 30 from $74.4 a year prior. Gearing, a measure of indebtedness, rose to 6.5% from minus 0.3% a year earlier and 5.3% the previous quarter. Aramco is looking at different geographies, currencies and instruments for debt issuance, Al-Murshed said. The company, long a reliable source of revenue for the Saudi state, confirmed a previously outlined $21.3 billion in total dividends for the second quarter, about $200 million of which is performance-linked dividends. DIVIDENDS SINK Aramco in March outlined total dividends of $85.4 billion for 2025 - a 31% drop from more than $124 billion the previous year. The performance-linked component is set to plunge 98% from 2024 to $900 million as free cash flow dwindles. Free cash flow dropped nearly a fifth year-on-year in the second quarter to $15.2 billion. For the Saudi government, which owns 81.5% of Aramco shares directly and another 16% through its sovereign wealth fund PIF, dividends are a critical source of income, particularly as it invests to diversify the economy away from oil. Oil generated 62% of the government's revenue last year, and the International Monetary fund estimates the kingdom needs oil prices at more than $90 a barrel to balance its 2025 budget. Aramco's average realised crude oil price was $66.7 a barrel in the quarter, down from $76.3 in the first quarter and $85.7 in the second quarter of 2024. "We've pencilled in for Saudi Arabia to run a budget deficit of 5.0% of GDP this year," said James Swanston, senior economist at Capital Economics, adding the government would likely overshoot its annual borrowing plan. That would be more than double the 2.3% deficit, or about $27 billion, the kingdom projected in November for the 2025 budget. Sign in to access your portfolio
Zawya
7 days ago
- Business
- Zawya
Saudi Aramco second-quarter net profit drops 22% on lower revenues
DUBAI - Saudi Arabian oil company Aramco reported a 22% drop in second-quarter profit on Tuesday, mainly due to lower revenue. The world's top oil exporter reported a net profit of $22.7 billion in the three months ended June 30, missing a company-provided median estimate from 17 analysts of $23.7 billion. (Reporting by Yousef Saba; Editing by Christian Schmollinger)
Time of India
25-07-2025
- Business
- Time of India
OPEC+ panel likely to keep oil policy steady on Monday, sources say
London/moscow: An OPEC+ panel is unlikely to alter existing plans to raise oil output when it meets on Monday, four OPEC+ delegates said, noting the producer group is keen to recover market share while summer demand is helping to absorb the extra barrels. The meeting of the Joint Ministerial Monitoring Committee (JMMC), which includes top ministers from the Organization of the Petroleum Exporting Countries and allies led by Russia, is scheduled for 1200 GMT on Monday. Four OPEC+ sources told Reuters the meeting is unlikely to alter the group's existing policy, which calls for eight members to raise output by 548,000 barrels per day in August. Another source said it was too early to say. OPEC and the Saudi government communications office did not respond to a request for comment. OPEC+, which pumps about half of the world's oil, has been curtailing production for several years to support the market. But it reversed course this year to regain market share, and as U.S. President Donald Trump demanded OPEC pump more to help keep a lid on gasoline prices. The eight OPEC+ producers hold a separate meeting on August 3 and remain likely to agree to a further 548,000 bpd increase for September, three of the sources said, as reported by Reuters earlier this month. This would mean that, by September, OPEC+ will have unwound their most recent production cut of 2.2 million bpd, and the United Arab Emirates will have delivered a 300,000 bpd quota increase ahead of schedule. The JMMC meets every two months and can recommend changes to OPEC+ output policy. Oil prices have remained supported despite the OPEC+ increases thanks to summer demand and the fact that some members have not raised production as much as the headline quota hikes have called for. Brent crude was trading close to $70 a barrel on Friday. (Addiitonal reporting by Yousef Saba; Editing by David Holmes)
Yahoo
04-07-2025
- Business
- Yahoo
Exclusive-Saudi Aramco considers power assets sale to raise billions, sources say
By Federico Maccioni and Yousef Saba DUBAI (Reuters) -Saudi oil giant Aramco is looking to sell up to five gas-fired power plants, three sources with knowledge of the matter told Reuters, part of a broader effort to free up funds that could generate tens of billions of dollars. The potential sale of four or five gas-fired plants that power refineries could alone raise around $4 billion as the Saudi government pushes Aramco to increase profits and payouts to the state, two of the sources said. Aramco, the world's most profitable company and the main source of Saudi state income, has been looking to sell some assets, improve efficiency and cut costs, Reuters has reported. The company will also slash dividend payouts by nearly a third this year as lower oil prices hit its income. The state, which directly owns 81.5% of Aramco, is heavily reliant on the payouts, which include royalties and taxes. Besides the sale of the gas-fired plants, the company could divest assets such as housing compounds and pipelines, two of the sources said. Port infrastructure assets could also be up for sale, one of them and a third person said. Aramco declined to comment on the potential asset sales and had no immediate comment on the amount of money the fundraising drive could yield. The Saudi government communications office did not respond to Reuters requests for comment. Reuters could not determine a timeline for the sale. The three sources spoke on condition of anonymity because the process is private. Local businesses like Saudi utility firms could be interested buyers, one of the people said. Aramco fully or partly owned 18 power plants and related infrastructure locally supplying energy to its gas plants and refineries, according to its 2024 financial report. Other power plants are expected to come onstream soon. The Tanajib Gas Plant project is expected to start operations this year. The potential asset sales by Aramco coincide with Saudi Arabia Crown Prince Mohammed bin Salman's planned massive domestic projects to diversify the economy from oil while facing pressure from tumbling crude prices. Oil receipts made up 62% of state revenues last year with the Saudi budget showing a deficit of more than $30 billion in 2024 despite a $199 billion windfall from Aramco. Aramco sold $5 billion of bonds in May and signalled more borrowing. The country is pouring hundreds of billions of dollars into projects including showpiece events like the Expo 2030 world fair and soccer's FIFA World Cup 2034. Aramco is also seeking to raise funds for infrastructure by bringing in investors, Reuters reported in May. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-07-2025
- Business
- Yahoo
Exclusive-Saudi Aramco considers power assets sale to raise billions, sources say
By Federico Maccioni and Yousef Saba DUBAI (Reuters) -Saudi oil giant Aramco is looking to sell up to five gas-fired power plants, three sources with knowledge of the matter told Reuters, part of a broader effort to free up funds that could generate tens of billions of dollars. The potential sale of four or five gas-fired plants that power refineries could alone raise around $4 billion as the Saudi government pushes Aramco to increase profits and payouts to the state, two of the sources said. Aramco, the world's most profitable company and the main source of Saudi state income, has been looking to sell some assets, improve efficiency and cut costs, Reuters has reported. The company will also slash dividend payouts by nearly a third this year as lower oil prices hit its income. The state, which directly owns 81.5% of Aramco, is heavily reliant on the payouts, which include royalties and taxes. Besides the sale of the gas-fired plants, the company could divest assets such as housing compounds and pipelines, two of the sources said. Port infrastructure assets could also be up for sale, one of them and a third person said. Aramco declined to comment on the potential asset sales and had no immediate comment on the amount of money the fundraising drive could yield. The Saudi government communications office did not respond to Reuters requests for comment. Reuters could not determine a timeline for the sale. The three sources spoke on condition of anonymity because the process is private. Local businesses like Saudi utility firms could be interested buyers, one of the people said. Aramco fully or partly owned 18 power plants and related infrastructure locally supplying energy to its gas plants and refineries, according to its 2024 financial report. Other power plants are expected to come onstream soon. The Tanajib Gas Plant project is expected to start operations this year. The potential asset sales by Aramco coincide with Saudi Arabia Crown Prince Mohammed bin Salman's planned massive domestic projects to diversify the economy from oil while facing pressure from tumbling crude prices. Oil receipts made up 62% of state revenues last year with the Saudi budget showing a deficit of more than $30 billion in 2024 despite a $199 billion windfall from Aramco. Aramco sold $5 billion of bonds in May and signalled more borrowing. The country is pouring hundreds of billions of dollars into projects including showpiece events like the Expo 2030 world fair and soccer's FIFA World Cup 2034. Aramco is also seeking to raise funds for infrastructure by bringing in investors, Reuters reported in May. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
