Aramco's Performance-Linked Dividend Projected to Cease in 2025
Saudi Aramco is anticipated to discontinue its performance-linked dividend payments in 2025, following a more balanced cash cycle in 2024, according to a recent research note published by JPMorgan.
The note highlights that the previous 18 months witnessed substantial performance-linked dividend payments supported by exceptional financial results in fiscal years 2022 and 2023, but this cycle is expected to conclude by the end of 2024.
Aramco, which is scheduled to announce its 2024 financial results on March 4th, has projected $124.3 billion in total dividends for 2024, including $43.1 billion in performance-based dividends.
The Saudi government, which owns an 81.5% stake in Aramco, and the Public Investment Fund (PIF), which holds an additional 16%, heavily rely on the company's dividend payments. These dividends play a crucial role in funding PIF's investments aimed at diversifying the economy from oil dependence.
In 2022, the government sold a portion of its stake in Aramco through a secondary public offering, raising $12.35 billion.