Saudi Arabian oil company Aramco reported a 22% drop in second-quarter profit on Tuesday, mainly on lower revenue, while it racked up more debt.
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.
Aramco’s average realised crude oil price was $66.7 a barrel in the quarter, down from $85.7 in the second quarter of 2024 and $76.3 in the first quarter of this year.
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.
The company, long a cash cow for the Saudi state, confirmed a previously outlined $21.3 billion in total dividends for the second quarter, roughly $200 million of which is performance-linked dividends, a mechanism introduced after a windfall from oil prices in 2022 following Russia’s invasion of Ukraine.
Aramco in March outlined total dividends of $85.4 billion for 2025 – a 37% drop from its payout of over $124 billion the previous year. The performance-linked component is set to plunge 98% to $900 million as the company’s free cash flow dwindles.
Free cash flow dropped nearly a fifth year-on-year in the second quarter to $15.2 billion.
Reuters reported last month that Aramco is close to a deal to raise around $10 billion in investment from a group led by BlackRock and is considering selling up to five of its gas-powered power plants to raise up to $4 billion, as Riyadh presses the company to increase profit and payout.
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 spends on efforts to diversify the economy away from oil.
Oil generated 62% of the government’s revenue last year. The International Monetary fund estimates the kingdom needs oil at more than $90 a barrel to balance its 2025 budget.
Global crude benchmark Brent was trading at $68.83 at 0625 GMT.