On May 7th, Saudi Aramco released its financial report for the first quarter of 2024. The report revealed that the net profit for the quarter was SAR 1022.7 billion (approximately USD 272.7 billion), marking a 14.5% decline year-over-year. Operating income was SAR 4020.4 billion (approximately USD 1071.9 billion), a 3.7% decrease from the previous year. Additionally, capital expenditure rose to USD 10.832 billion, up from USD 8.746 billion the previous year, while free cash flow was USD 22.8 billion, below the previous year's USD 30.9 billion.
The decline in Saudi Aramco's performance for the quarter was primarily influenced by the dynamic changes in the global oil market supply and demand. Continuous production cuts by oil-producing countries and the uncertainty in the global economic recovery have impacted oil prices and sales volumes. Moreover, a decrease in profit margins in the refining and chemical sectors was a significant factor contributing to the revenue and profit declines. Despite these macroeconomic challenges, Saudi Aramco continued to pay USD 31 billion (equivalent to over CNY 220 billion) in basic dividends to shareholders, including the Saudi government, and plans to pay an additional USD 10.8 billion in performance-linked dividends in the second quarter. Furthermore, the total dividends for this year are expected to exceed those of 2023, reaching USD 124.3 billion, which includes USD 81.2 billion in basic dividends and USD 43.1 billion in performance-linked dividends.
To support oil prices and maintain competitiveness in the market, Saudi Aramco recently announced an increase in the official selling price of Arabian Light crude oil to Asian markets. The company plans to continue its production cut strategy to stabilize and boost oil prices while also actively adjusting its sales strategy to adapt to market changes. Additionally, Saudi Aramco is intensifying its investments in the Chinese market, particularly in emissions reduction, material research and development, and the chemical industry. Recently, Saudi Aramco's President and CEO Amin H. Nasser emphasized the importance of cooperation with Chinese strategic partners. On April 22nd, Hengli Group signed a Memorandum of Understanding with Saudi Aramco to discuss strategic cooperation in crude oil supply, raw material supply, product procurement, and technology licensing. Saudi Aramco also intends to purchase an additional 10% plus one share of Hengli Petrochemical from Hengli Group, further deepening the cooperation between the two parties.