Saudi Arabian Oil, known as Saudi Aramco, has recently streamlined its full-year capital expenditure forecast following a dip in net income for the third quarter, aligning with market expectations. The company made significant strides in its crude oil output and gas operations, investing $13.23 billion over the three months ending September 30, surpassing the $11.03 billion spent during the same period last year and exceeding RBC Capital Markets' estimate of $13 billion.
In light of its year-to-date expenditures, Aramco has revised its capex guidance for 2024 to a range of $51 billion to $54 billion, down from a previously stated range of $48 billion to $58 billion. This adjustment indicates anticipated fourth-quarter spending between $13 billion and $16 billion. RBC remarked, 'The narrowing of the capex range is consistent with expectations given YTD spend.' Within a context of declining oil prices, the oil behemoth reported a third-quarter net income of $27.56 billion, which matched analyst consensus due to its efficient upstream production and robust downstream operations.
The consensus projected by analysts was $26.9 billion, while RBC had estimated a net income of $27.2 billion. Year-over-year, net income fell to 103.37 billion Saudi riyals from 122.19 billion due to diminishing refining margins, fluctuations in inventory valuation, and several non-cash charges affecting the downstream sector.
Company revenue dipped to 416.63 billion riyals from 424.1 billion riyals, primarily due to lower crude oil prices and reduced values in refined and chemical products. Operating cash flow saw an increase, climbing to $35.2 billion from $31.4 billion, prompting the board to declare a dividend of 0.4815 riyal per share, comprising both base and performance-linked dividends, surpassing last year’s 0.4554 riyal per share.
Aramco is poised to distribute total dividends within the range of $124 billion in 2024. RBC commented, 'A decent set of results from Aramco this morning, with the beat on cash flow vs. our numbers partly driven by lower cash taxes.' Following the news, the stock experienced a slight decline in midday trading..