I’m surprised no one has commented that profits are declining but not the dividend. Any thoughts? I am curious whether there will be a change to the dividend policy in the future.
7 replies (most recent on top)
Please read the IPO prospectus. There is a commitment to paying a fixed amount of dividend (regardless of the profits) to the shareholders during the first 5 years from the IPO date.
Maybe improving the efficiency of the local workforce from 0.0001% to just 0.001% (a ten fold increase in productivity) would be sufficient to balance the books.
I knows it may appear a big ask, expecting them to actually WORK for their salary but I’m sure it will catch on, sometime in the next millennium or so....
Dividend policy will continue as is as long as Government and Saudis are main beneficiaries. What other source of income does Saudi have other than hydrocarbons and religious tourism? The pivot East to China and India will continue as Western world loses influence. Weapons and defense support will also pivot towards Russia and China.
The “dividend” is just an annual raid on Aramco’s cash by the “95% owner”. He doesnt care if Aramco has to mortgage future profits to pay it.
Plus... Layoffs are coming in June just like last year
What percentage of Aramco Expats are US Payroll? Back in 2013, they told me it was about 50%. Now? 20%? Seems to me there is not much left to cut.
Future Dividends will come from: (1) US payroll grade code reductions, (2) US payroll pay cuts, (3) US payroll benefit cuts and (4) reduction and or elimination of the entire US expat employment base in the company. These changes are long overdue.