Saudi Aramco: Debt at three-year high and coupon cut by a third
The results of the Saudi oil giant have a direct impact on the kingdom's finances. And after a weak first quarter the scenario (also due to Opec+ policies) has become even more difficult
2' min read
2' min read
The price war that has unleashed on the oil market is likely to cost Saudi Arabia dearly, burdening an already stressed state budget. A further wake-up call came from the quarterly report of Saudi Aramco, which on Sunday 11 - publishing falling profits and a debt that jumped to a three-year high - confirmed a one-third reduction in dividends.
The coupon, which is a major source of revenue for the kingdom's coffers, is reduced by some USD 10 billion for the January-March period, to USD 21.4 billion, in line with the company's indications in March.
After all, the Saudi oil giant continues to prove more resilient than the Western majors: in the three months, net profit fell by just 4.6% to the equivalent of USD 26 billion, beating analysts' expectations. But free cash flow collapsed to $19.2 billion (-15.8%), insufficient to finance dividends, however small.
Aramco's net debt rose sharply in the quarter, by as much as 18% to USD 24.6 billion, a level it had not touched since 2022, although leverage is not at alarmingly high levels: it rose to 5.3%, up from 4.5% at the end of 2024.
Looking ahead, however, the situation is likely to worsen due to the fall in oil prices, which has intensified since April - thus after the end of the first quarter - partly also due to the change of course on Opec+ production policies that Riyadh itself seems to have inspired.
