Aramco reports near 5% drop in first-quarter profit

Dubai: Saudi oil giant Aramco reported a 4.6 per cent drop in first-quarter profit on Sunday due to lower sales and higher operating costs.

The world's top oil exporter reported net profit of 97.54 billion riyals ($26.01 billion) in the three months ended March 31, which beat a company-provided median estimate from 16 analysts of $25.36 billion.

Aramco confirmed total dividends of $21.36 billion for the first quarter, $219 million of which was performance-linked dividends, a mechanism introduced after a windfall from oil prices in 2022 following Russia's invasion of Ukraine.

The oil giant has long been a cash cow for the Saudi state. Oil generated 62 per cent of government revenue last year and the International Monetary Fund has estimated Saudi Arabia needs oil at $92.3 this year to balance its budget.

The results were released before US President Donald Trump's visit to the kingdom on Tuesday. His trade war with China has spooked global markets and sent crude prices tumbling amid fears of a global economic slowdown.

Global crude benchmark Brent has been on a largely downward trajectory since a 2025 high of $82.03 in January. It closed at $63.91 on Friday.

Aramco had said in March it expected to declare total dividends of $85.4 billion in 2025, down sharply from last year's payout of over $124 billion, which was based on 2023 and 2024 earnings. The performance-linked payout, which last year totalled $43.1 billion, was slashed roughly 98 per cent as free cash flow dried up.

The Saudi government directly owns roughly 81.5 per cent of Aramco, while its sovereign wealth fund PIF controls an additional 16 per cent stake. It also leans on the group's payouts to invest in other sectors as it tries to diversify the economy away from oil.

Diversification efforts include building or renovating 15 stadiums for the 2034 World Cup, the most high-profile of several showpiece events the kingdom will host in coming years.

Amid lower oil prices, the kingdom has scaled back some lofty ambitions to prioritise completing projects essential to hosting global sporting events over the next decade as rising costs weigh, sources told Reuters in November.

Aramco's free cash flow was $19.2 billion in the first quarter, down 15.8 per cent from a year ago.

"Global trade dynamics affected energy markets in the first quarter of 2025, with economic uncertainty impacting oil prices," Chief Executive Amin Nasser said in a statement, adding Aramco's results showed the value of its low-cost operations.

"Such periods also highlight the importance of disciplined capital planning and execution while we continue to take a long-term view. In volatile times Aramco's resilience underpins both our financial performance and our sustainable and progressive base dividend."

Capital expenditure (capex) was just over $12.5 billion in the first quarter, up 15.9 per cent from a year before. Aramco had outlined capital investments, which includes capex and external investments, of between $52 billion and $58 billion. Capex was $50.4 billion last year.

($1 = 3.7507 riyals)