Saudi Aramco to increase dividends despite drop in profits

Saudi Aramco to increase dividends despite drop in profits

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Saudi Aramco plans to boost its dividend payments further this year despite reporting a 14 per cent fall in quarterly profits, which missed analysts’ expectations.

Aramco said on Monday it expected to declare total dividends of $124.3bn this year, a rise of almost 30 per cent compared with last year, when it also increased payments by 30 per cent to $97.8bn after reporting the second highest annual profits in its history.

The payout from the world’s largest oil producer remains the most important source of revenue for the Saudi state, which owns 82 per cent of the company, especially as the kingdom struggles with a budget deficit amid subdued oil prices. The IMF has previously said that Riyadh will need an average oil price close to $100 a barrel to balance its budget amid its spending, a level not seen so far this year.

The state, which controls a further 16 per cent of Aramco through the PIF — the country’s sovereign wealth fund — wants to use the proceeds from oil to fund megaprojects including new cities, the world’s tallest skyscraper and a vast building shaped like a cube