Saudi Aramco expects the total dividend payout to be about $85 billion in 2025, compared with $124 billion for last year, it said in a statement Tuesday.
The distribution has been in focus for investors and economists alike with the level of the payment likely to determine how much more the Saudi government would need to borrow to fill its budget deficit.
Last year’s total dividend, the world’s largest, is made up of two parts: a base payment and a performance-linked portion.
Starting in 2025, the company had earlier said it plans to start paying the special component as a portion of free cash flow after covering the base dividend and any investments. Aramco on Tuesday confirmed it would stick to that policy.
The company said the base payout will be $21.1 billion for the fourth quarter, a 4.2% increase from a year earlier. At this rate, almost the entire dividend for 2025 would be made up of the base component.
The focus on the dividend comes as Aramco reports weaker earnings due to subdued oil prices and production near the lowest level in more than three years. Weak prospects for global economic growth and softer demand have pushed crude prices in London to the lowest level in almost three months. Brent is averaging less that $77 a barrel this year, far below the more than $90 Saudi Arabia needs to balance its budget.
Aramco’s net income for 2024 was 393.89 billion riyals ($105 billion). Free cash flow of about $85 billion was below the total dividend payout.
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