Aramco profits fall in Q1 amid weaker oil price, lower volumes
Net profit at Saudi Aramco fell 19% year/year in the first quarter to $31.9bn, the company reported on May 9, with revenue down due to weaker oil prices and reduced volumes.
The national oil giant's average realised oil price for the three-month period was $81/barrel, down from $97.7/b a year earlier. Hydrocarbon production came to 12.8mn barrels of oil equivalent/d, compared with 13mn boe/d.
Analysts at RBC Capital Markets noted that net income came in just above the consensus, but included a $1.2bn early payment gain relating to Aramco's acquisition of petrochemicals producer SABIC.
Free cash flow was stronger at $30.9bn, versus $30.6bn, while Aramco increased dividend payouts to $19.5bn, from $18.8bn. Capital expenditure grew to $8.75bn, from $7.6bn. The company's guidance for the full year remains the same at $45-55bn.
EBIT profit was down to $59bn, versus $74.6bn a year earlier.
"Aramco's Q1 numbers were largely without surprise with results falling expectedly given weaker macro conditions in the quarter versus comparable periods," RBC analysts wrote. "The key development is on the shareholder returns front with Aramco unveiling its version of a variable payout policy."
RBC expects a $12-18bn growth in distributions next year, raising the company's dividend yield to 4.0-4.2%, from 3.5%.
Aramco stressed that meeting expanding domestic natural gas demand "remains a strategic priority." During the period commissioning work continued at the Hawiyah gas plant expansion project, due on stream in the current year. The project will expand the plant's processing capacity from 2.5bn ft3/d to 3.76bn ft3/d.