Saudi Aramco profit falls 25% but dividend in line with planned payout for year

[Tom Kirkman + 8,860]

Looks like that Aramco IPO is going to turn around and bite the Saudi royal family in the butt. 

Saudi Aramco dividend to be paid to minority shareholders, but expecting a big cut in "dividend" to the royals.  Ouch.

 

Saudi Aramco profit falls 25% but dividend in line with planned payout for year

DUBAI (Reuters) - Saudi Aramco, the world’s top oil exporting company, on Tuesday reported a 25% fall in first-quarter net profit, missing analyst estimates, but its quarterly dividend was in line with a plan for a $75 billion payout for the year.

Analysts had expected Aramco, which went public last year, to maintain payouts to minority shareholders while cutting the dividend to the Saudi government, whose finances have been battered by plunging oil prices amid the coronavirus pandemic.

Brent crude prices fell 65.6% in the first quarter, before OPEC+ producers agreed to cut oil supply by a record 9.7 million barrel per day from May to help shore up prices and curb oversupply.

Despite the drop in profit, the state oil giant's cashflow remained strong compared to other oil majors, reflecting its strong balance sheet and resilience.

Shares of Aramco were up 1.3% at 31.30 riyals at 0825 GMT, still trading below the IPO price of 32 riyals. Aramco’s net profit fell to 62.48 billion riyals ($16.64 billion) after zakat and tax for the quarter to March 31 from 83.29 billion riyals a year earlier, below estimates by analysts who expected a profit of $17.8 billion.

Aramco said total dividends of $13.4 billion were paid for the fourth quarter of 2019 and that it would distribute a dividend of $18.75 billion for the first quarter of this year. This is in line with its plan to pay a base dividend of $75 billion for 2020.

The Q1 dividends “are the highest of any listed company worldwide” and will be paid in the second quarter, Aramco said. 

It did not make any announcement on its future dividend policy, however.

Yousef Husseini, an analyst EFG Hermes, said though there was no change to the dividend policy in the first quarter, he still expects the share of the dividend paid to the government, which remains the biggest shareholder, will be reduced.

“They will cut the share of the government in the second quarter but there is some upside if they renegotiate the SABIC deal which could save them some cashflow,” he said.  ...

 

[Douglas Buckland + 6,308]

I reckon Lambourgini, Bentley and Bugatti will be feeling the pinch shortly...

[wrs + 893]

You forgot Ferrari.

[John Foote + 1,135]

Aramco has admitted the bond they are pursuing for the SABIC acquisition, some of the monies might be allocated to the dividend requirements. 

Wow, that fast.

Personally wouldn't lose sleep if a few bankers got a haircut over this.  

They really should kill the SABIC deal. I swear they must have hired some of ENRON's accounts to plan this out.

[BLA + 1,666]

3 hours ago, John Foote said:

Aramco has admitted the bond they are pursuing for the SABIC acquisition, some of the monies might be allocated to the dividend requirements. 

Wow, that fast.

Personally wouldn't lose sleep if a few bankers got a haircut over this.  

The 25% drop was for Q1.  During Q1 the Aramco average oil selling price was $50 bbl (per Aramco earnings release)

WHAT WILL THE DROP BE FOR Q2 ??? ARAMCO IS HALF WAY THRU Q2.   Won't be anywhere close to the Q1 $50 bbl. So far closer to $25 bbl avg Q2.  That should average higher , but then again it might night. BRENT PRICE ~ $30 BBL.  SAUDI DISCOUNT STILL OVER $5.OO

Other topic: Aramco has delayed the payment of their dividend.  They say later in the summer, or could be longer.

Note the stock comes off lockup the beginning of June.  Delaying the dividend put the Saudi people who put their life savings into Aramco stock in a perplexing situation.  Many want out.  But if you bail in June after lockup ends you forfiet  the dividend.  A real dilemma. 

I think lockup ends June 11th.  Not 100% sure. 

Edited May 12, 2020 by BLA

[wrs + 893]

Just got sellng prices on WTI for March, was $25.  About what I had expected.  Not sure what it will be for April.  Lot less I think.

[0R0 + 6,251]

Russia has been realizing $7 for Urals recently. The Chinese are such generous friends. Shipping charges eat the revenue.