Aramco posts drop in annual profit, announces its first buyback
Saudi Arabia's Aramco, the world's top oil exporter, reported a 12% drop in annual profit mainly due to lower crude prices, but announced it would repurchase up to $3 billion worth of shares in its first-ever buyback.The buyback program will be conducted over the next 18 months. Until now, the company has relied on its massive dividend payouts to reward shareholders.The results come at a highly volatile time for global oil markets as the U.S.-Israeli war on Iran has led to a near-closure of the Strait of Hormuz and has forced several regional producers to curb output.Brent crude, which surged to near $120 on Monday, is trading around $93 on Tuesday.Aramco reported $93.4 billion in net income for 2025, below an LSEG consensus estimate of $95.6 billion.For the fourth quarter, net profit tumbled 20.5% to nearly $17.8 billion on higher operating costs, marking its 12th consecutive quarter of year-on-year profit decline.Aramco confirmed paying a base dividend of $21.1 billion for the fourth quarter and $219 million in performance-linked dividends, a mechanism calculated based on free cash flow introduced following bumper profits in 2022 following the Ukraine war.Total dividends paid for the year were $85.5 billion, down from $124 billion in 2024.Aramco has long been a cash cow for the Saudi state, which relies on fossil fuels for more than half of government revenues. The kingdom directly holds nearly 81.5% of the company and its sovereign investor, the Public Investment Fund, holds another 16%.Total revenue for the year fell 7.2% to $415.8 billion, on weaker prices for crude oil, as well as refined and chemical products.The company's gearing ratio - a measure of indebtedness - dropped to 3.8% at the end of 2025, down from 4.5% at the end of 2024.Reuters
Saudi Arabia's Aramco, the world's top oil exporter, reported a 12% drop in annual profit mainly due to lower crude prices, but announced it would repurchase up to $3 billion worth of shares in its first-ever buyback.The buyback program will be conducted over the next 18 months. Until now, the company has relied on its massive dividend payouts to reward shareholders.The results come at a highly volatile time for global oil markets as the U.S.-Israeli war on Iran has led to a near-closure of the Strait of Hormuz and has forced several regional producers to curb output.Brent crude, which surged to near $120 on Monday, is trading around $93 on Tuesday.Aramco reported $93.4 billion in net income for 2025, below an LSEG consensus estimate of $95.6 billion.For the fourth quarter, net profit tumbled 20.5% to nearly $17.8 billion on higher operating costs, marking its 12th consecutive quarter of year-on-year profit decline.Aramco confirmed paying a base dividend of $21.1 billion for the fourth quarter and $219 million in performance-linked dividends, a mechanism calculated based on free cash flow introduced following bumper profits in 2022 following the Ukraine war.Total dividends paid for the year were $85.5 billion, down from $124 billion in 2024.Aramco has long been a cash cow for the Saudi state, which relies on fossil fuels for more than half of government revenues. The kingdom directly holds nearly 81.5% of the company and its sovereign investor, the Public Investment Fund, holds another 16%.Total revenue for the year fell 7.2% to $415.8 billion, on weaker prices for crude oil, as well as refined and chemical products.The company's gearing ratio - a measure of indebtedness - dropped to 3.8% at the end of 2025, down from 4.5% at the end of 2024.Reuters
What's Your Reaction?
Economist Admin
Admin managing news updates, RSS feed curation, and PR content publishing. Focused on timely, accurate, and impactful information delivery.
