Saudi Aramco dividend remains unchanged despite 45% slump in profit

Saudi Aramco left its dividend unchanged at $18.75 billion even as it failed to generate enough cash to cover the payout and reported a 45% drop in third-quarter profit.

Net income at the world’s biggest oil company was 44.2 billion riyals ($11.8 billion), broadly in line with analysts’ expectations. Sales fell 25% from the same period of 2019 to $53.3 billion.

The state energy firm’s free cash flow was $12.4 billion between July and September, compared with $20.6 billion a year earlier. Gearing climbed to 21.8% from 20% in June and from minus 5% in March, when Aramco had more cash than debt.

Aramco’s shares rose 0.6% to 34.40 riyals in early trading in Riyadh, paring this year’s drop to 2.4%. The stock has been bolstered by management’s insistence that it will pay a $75 billion dividend in 2020, almost all of which will go to the Saudi Arabian government.