Aramco Announces Robust Earnings For Q2 And First Half Of 2024, Eyes Strategic Expansion

Aramco has revealed its financial results for the second quarter and first half of 2024, showcasing robust performance and progress in its long-term growth strategy. The company reported a net income of SAR109.0 billion for Q2 and SAR211.3 billion for the first half of the year. Operating cash flow reached SAR116.6 billion in Q2 and SAR242.6 billion in H1, while free cash flow was SAR71.1 billion in Q2 and SAR156.4 billion in H1.

The company is advancing its strategic gas expansion with contract awards exceeding SAR93.8 billion, aiming for over 60% growth in sales gas production by 2030 compared to 2021 levels. Additionally, Aramco has acquired a 10% equity interest in HORSE Powertrain Limited, a global powertrain solutions firm established by Renault Group and Geely.

In terms of retail expansion, Aramco successfully acquired a 40% equity stake in Gas & Oil Pakistan Limited. The company also signed an agreement with Pasqal to utilise the first quantum computer in the Kingdom, marking significant strides in technological advancements.

Aramco's gearing ratio stood at 0.5% by mid-2024, down from 6.3% at the same time last year. The company plans to pay a base dividend of SAR76.1 billion for Q2 2024 and a performance-linked dividend of SAR40.4 billion in Q3. It anticipates declaring total dividends of SAR465.9 billion for the entire year.

The secondary public offering of Aramco shares and the issuance of SAR22.5 billion in bonds attracted strong investor interest globally, reflecting confidence in the company's financial health and strategic direction.

CEO's Insights on Performance

Aramco President and CEO Amin H. Nasser highlighted the company's strong financial performance with robust earnings and cash flows during the first half of the year. "This has enabled it to provide a sustainable and progressive base dividend and a performance-linked dividend that grows with the increasing number of shareholders," he stated.

Nasser also emphasized that Aramco continues to create value supported by long-term competitive advantages, exceptional financial resilience through cycles, and a strong balance sheet.

Future Prospects

Nasser noted significant progress in key strategic areas during Q2, including advancing its gas strategy, expanding its new energy portfolio, partnering with leading car manufacturers on low-emission vehicle technologies, and growing its global retail network.

"The company continues to explore new opportunities to enhance its portfolio and capabilities to enable a secure and more sustainable energy future," Nasser added.

Aramco's commitment to creating value is evident from positive investor responses to both the government's secondary public offering of Aramco shares and the $6 billion bond issuance.

The company's strategic initiatives are aimed at ensuring long-term growth while maintaining financial stability through various economic cycles.

With inputs from SPA