Saudi Aramco Reports Second-Highest Net Income Of $121.3bn In 2023

By Nadin Hassan and Nirmal Narayanan

Saudi Arabian Oil Co. has announced a net income of $121.3 billion in its full-year 2023 financial results, marking the second-highest in its history. 

These results highlight Aramco’s unique operational flexibility, reliability, and cost-effective production base, showcasing the company’s continuous commitment to providing value to its shareholders, it said in a press release. 

In a press statement, Amin H. Nasser, Aramco president and CEO, said: “In 2023 we achieved our second-highest ever net income. Our resilience and agility contributed to healthy cash flows and high levels of profitability, despite a backdrop of economic headwinds. We also delivered for our shareholders with a 30 percent year-on-year increase in total dividends paid in 2023.” 

In 2023, Aramco reported a net income of $121.3 billion, a decrease from $161.1 billion in 2022, marking the company’s second-highest net income to date. The year-on-year decline is attributable to lower crude oil prices and volumes sold, along with reduced refining and chemical margins. This decrease was partially offset by a reduction in production royalties, as well as lower income taxes and zakat during the year. 

On the other hand, the state-owned oil giant reported a net income of $27.8 billion in the fourth quarter of 2023, aligning with analyst consensus, despite incurring certain non-cash charges of approximately $1.5 billion. 

The company announced a total dividend payment of $97.8 billion in 2023, marking a 30 percent increase compared to 2022. 

Aramco has further declared a base dividend of $20.3 billion for the last three months of 2023, slated to be disbursed in the closing quarter of this year. Moreover, the company’s board has approved a $10.8 billion performance-linked dividend, marking the third such payout. 

In 2023, Aramco’s capital investments reached $49.7 billion, reflecting a 28 percent increase from the previous year, 2022. The company also projected that capital investments in 2024 could range from $48 billion to $58 billion. 

Nasser added: “Our capital expenditures increased in line with guidance as we seek to create and capture additional value from our operations, positioning the company for a future in which we believe oil and gas will be a key part of the global energy mix for many decades to come, alongside new energy solutions.”  

The press statement further indicated that the oil firm’s free cash flow reached $101.2 billion in 2023, compared to $148.5 billion in 2022. 

The company’s balance sheet remains strong as its gearing ratio at the end of 2023 was -6.3 percent, compared to -7.9 at the end of 2022, Aramco added.  

Nasser further noted that the recent directive from the Saudi government to maintain Aramco’s maximum sustainable capacity at 12 million barrels per day is providing the company with increased flexibility. The directive also creates a window of opportunity to focus on increasing gas production and enhancing liquid-to-chemicals business.  

“In parallel, announcements of our first international investment in LNG (liquefied natural gas), the growth of our international retail operations, continued progress in major overseas refining and chemical projects, and our emerging new energies portfolio all serve to highlight our ability to capitalize on new market opportunities and advance our strategic objectives,” added Nasser. 

Speaking during a press conference call following the financial results, Nasser noted: “We firmly believe that the world would need a mix of energy sources, including oil and gas, renewables, hydrogen and other sources of energy to achieve a pragmatic, stable and orderly energy transition.” 

He added: “As a low-cost producer with one of the lowest upstream carbon intensities among major producers in our industry, we have a critical role to play in meeting the world’s demand for reliable and affordable energy.” 

Additionally, he told Arab News, “We are really eager to participate more and more in renewables and other sources of energy. Our plan is to target 12 gigawatts by 2030 in solar and wind. I think that target will be increasing in the future, depending on the target in the Kingdom as it accelerates.” 

“During the year, we also made significant progress in expanding our gas production, which we now expect will increase by more than 60 percent by 2030 when compared to 2021 levels,” he added.  

He continued: “We created an admin area responsible for renewable, so we’re also looking at investments in renewables not only in the Kingdom but also globally, so looking at opportunities in solar, wind, hydrogen, carbon capture and storage.” 

Nasser also announced plans to capture 9 million tons of CO2 annually by 2027 through collaborative efforts between Aramco and its partners.