Lower oil prices dent profits at Saudi Aramco

Energy giant Saudi Aramco reported lower first-quarter earnings on Tuesday, after oil and gas prices fell back from historic highs.

Net income at the state-controlled oil firm was $31.9bn in the three months to 31 March, compared to $39.5bn a year previously, while earnings before interest and tax fell to $59.1bn from $74.6bn.

The results were, however, still slightly ahead of analyst expectations.

Aramco said global crude prices had declined in the first quarter, driven by "macroeconomic events contributing to market volatility", but it remained well-positioned to withstand "fluctuating" commodity prices.

Aramco also said it would introduce performance-linked dividends, despite the fall in income, with a target payout of between 50% and 70% of annual free cash flow. Amin Nasser, chief executive, said the move was "reinforcing our commitment to maximise long-term shareholder value".

He continued: "The results reflect Aramco’s continued high reliability, focus on cost and our ability to react to market conditions as we generate strong cash flows and further strengthen the balance sheet.”

"We are moving forward with our capacity expansion, and our long-term outlook remains unchanged as we believe oil and gas will remain critical components of the global energy mix for the foreseeable future."

As at 1130 BST, shares in Aramco were trading 3% higher. The Saudi government owns around 90% of the stock.