Aramco posts $22.67bn Q2 profit amid market volatility

06/08/2025 02:33 AST

Saudi Aramco reported a net profit of SR85 billion ($22.67 billion) for the second quarter of 2025, underscoring its operational strength and financial resilience amid ongoing market volatility.

For the first half of the year, net profit reached SR183 billion, supported by robust cash flows, consistent shareholder payouts and exceptional supply reliability.

The company's board declared a base dividend of SR79.1 billion and a performance-linked dividend of SR0.8 billion for the second quarter, both scheduled for payment in the third quarter, according to a press release.

In a statement, Amin Nasser, president and CEO of the energy firm, said: "Aramco's resilience was proven once again in the first half of 2025 with robust profitability, consistent shareholder distributions and disciplined capital allocation."

He added: "Despite geopolitical headwinds, we continued to supply energy with exceptional reliability to our customers, both domestically and around the world."

While quarterly earnings came in strong, net profit dipped from SR97.5 billion in the first quarter and SR109 billion a year earlier, driven largely by weaker oil prices. The average realized crude oil price fell to $66.7 per barrel in the second quarter, down from $76.3 in the first quarter and $85.7 in the second quarter of 2024.

Adjusted net income - a measure reflecting underlying performance - stood at SR91.9 billion for the quarter and SR191.6 billion for the first half. Cash flow from operating activities came in at SR103.1 billion for the quarter and SR222.4 billion for the half-year period, while free cash flow reached SR57 billion in the second quarter and SR129 billion over the six-month span.

Nevertheless, Aramco maintained 100 percent supply reliability and pushed forward with key upstream projects.

"Market fundamentals remain strong and we anticipate oil demand in the second half of 2025 to be more than 2 million barrels per day higher than the first half," Nasser said.

During the media conference call following the earnings release, he reiterated that Aramco's performance over the first half of 2025 demonstrated the company's resilience and ability to adapt effectively amid ongoing uncertainty and market volatility.

In response to a question by Arab News, Nasser expressed confidence in Aramco's ability to meet its strategic objectives, highlighting the strength of the company's balance sheet.

He emphasized that the current gearing ratio of 6.5 percent positions Aramco among the strongest globally in terms of financial stability.

"We always look at potential to improve efficiency in our spending, building flexibility and discipline. This is embedded in our planning and capital discipline, and we have demonstrated that flexibility when appropriate, always recognizing the ability to generate long-term value," he added.

Aramco's base dividend of SR79.1 billion for the second quarter represents a 4.2 percent year-on-year increase, Nasser noted, adding that "this keeps us on track to deliver strong shareholder dividend distribution this year, subject to board discretion."

Ziad Al-Murshed, executive vice president and chief financial officer of Aramco, told Arab News: "We are maintaining our dividend distribution, which has been increased by 13 percent over the last three years. Again, that's another testament to the financial strength of the company."

He added: "Not only are we undertaking the largest capital program in our history due to unique opportunities, but we are also increasing dividends as we aggressively grow."

On the market outlook, the Aramco CEO noted that global oil demand had shown notable resilience, supported by steady economic performance in major economies such as China and the US.

Physical market indicators also remained strong, reflecting the overall strength in market fundamentals.

Nasser said that oil demand in the second half of the year is usually higher, on average, than the first half due to seasonal demand.

"A strong demand for this new offering is a testament to the confidence of global investors in both Aramco's financial resilience and our robust balance sheet," he added.

On upstream development, Aramco continued to advance the Berri, Marjan and Zuluf crude oil increments and confirmed that the Jafurah Gas Plant remains on track. Phase one of the Dammam development project was also brought onstream during the period.

"Procurement and construction activities are progressing for Marjan crude oil increment and also for the Jafurah phase one gas plant, which are on track for completion this year," Nasser stated.

He added: "Phase one of our Dammam project has also been brought onstream. This project helps us to tap into around 850 million barrels of reserves in the Dammam complex."

Aramco's downstream growth remains on track as the company expands its presence in new growth markets, launches new products and upgrades its portfolio.

"We continue to pursue initiatives that drive incremental operating cash flow, including growing our liquid-to-chemical business and making performance improvements across the business," Nasser said.

He added that Aramco is also investing in five solar and two wind projects in the Kingdom, holding a 30 percent equity stake in each.

"We believe hydrocarbons will continue to play a vital role in meeting global energy and chemical demand. Meanwhile, we are investing in innovation in carbon capture, hydrogen, renewables and digital innovation, with a focus on AI," he said.

Arab News