Aramco’s dividend decision — set to be announced today — is getting ink from Bloomberg, as the company’s distributions have outpaced earnings, flipping it to net debt from a net liquid position of over USD 27 bn a year ago.

More debt might be necessary: The Kingdom may need to issue another USD 5-6 bn in bonds this year to help cover the gap, adding to its nearly USD 15 bn in bond sales so far — making it the biggest borrower in emerging markets, Pinebridge Investments analyst Samsara Wang told the business news outlet.

No special dividends this year? Aramco will only pay its special (performance-linked) dividend if there is enough freecash flow left after covering its base dividend and investments, Bloomberg said. Analysts expect cashflow to fall below the base dividend next year, leaving little room for extra distributions.

REMEMBER- Aramco is expected to maintain its dividend payout at SAR 116.5 bn (USD 31.1 bn) for 4Q 2024, the same as the preceding three quarters, to bring its total dividends for the year to SAR 466 bn (USD 124.3 bn). Aramco’s net income dipped 15.4% y-o-y to SAR 103.4 bn (USD 27.6 bn) in 3Q 2024, while revenues fell 1.8% to SAR 416.6 bn, with the oil giant attributing the drop in its bottom line to falling crude prices and weaker refining margins.

ALSO- The PIF’s recent surge in M&A activity across various sectors was also in the spotlight in a Bloomberg report yesterday. The piece breaks down the fund’s strategy of using capital to attract foreign firms in order to boost local development, with high profile agreements including snapping up a minority stake in Dazn, the USD 4.9 bn acquisition of Scopely, and Alat ’s purchase of 15% of TK Elevator.

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