Aramco Posts Record Earnings on Higher Prices and Volumes; Dividend Unchanged Until 2023

Aramco reported record net income of $48.4 billion during the second quarter compared with $25.5 billion the year before on higher oil prices and volumes and stronger refining margins. Free cash flow increased to $34.6 billion in the quarter compared with $22.6 billion the year before. Net debt and gearing fell to $35.20 billion and 7.9%, respectively, from a net debt of $56.4 billion and gearing of 14.2% at year-end 2021. Aramco paid $18.8 billion in dividends during the quarter, or $0.09 per share as well as the previously announced distribution of one bonus share for every 10 shares. Aramco reiterated it plans to grow the dividend over time with financial results, and the board will review the dividend with the full-year 2022 results in March 2023. We expect a modest increase at least, given the relatively low yield and balance sheet improvement.