BREAKING NEWS | Aramco’s Dividend Defence Are Triple-Locked

RIYADH | SAUDI ARABIA – Saudi Arabia has deployed its triple-bottomed dividend defence sooner than expected. The Saudi state energy giant is handing $18.75 billion to investors this quarter even though earnings plunged to little more than a third of the amount. It’s a contrast with rivals BP and Royal Dutch Shell, which both trimmed their payouts. But even if crude demand plunges again, the $1.8 trillion firm has multiple ways of ensuring rewards for shareholders.

Given that the price of West Texas Intermediate crude briefly turned negative in April, Aramco’s net income of $6.6 billion in the three months to June is a testament to its efficiency. On average, each barrel of oil cost it just $7.5 to produce, including $4.7 per unit of capital spending. Even at an average price of just $23, Aramco remains comfortably in the black.

A gradual recovery in crude prices is Aramco boss Amin Nasser’s first wish. The black stuff is now trading at $44 a barrel, and with gasoline and diesel demand in China almost back at pre-crisis levels, Goldaman Sachs analysts reckon in might finish the year as high as $63.

Even if prices remain subdued, however, Nasser has scope to ride out the storm. With just $6.1billion of free cash flow in the quarter, Aramco will effectively borrow nearly $13 billion to fund its payout. After this year’s takeover of petrochemicals group Saudi Basic Industries, net debt has jumped to $286 billion. But that’s still only a fifth of total funding, compared with 36% for BP. To hit a similar ratio, Aramco would have to fund its $75 billion annual dividend entirely out of debt three years in a row.

Public investors who bought 1.5% of Aramco’s shares last year have one more line of defence. The company has promised to pay their dividend, which costs $1.1. billion a year, ahead of its main shareholder, the Saudi government. Cutting its contribution to state coffers would doubtless cause conniptions in Riyadh but keep Aramco’s capital markets reputation intact. Little wonder Aramco shares are down just 6% this year, against BP’s 35% decline. For thick – skinned investors, that’s fitting reward for turning a blind eye to Saudi’s abysmal human rights record or Aramco’s impact on the climate.

BUSINESS | LVMH Submit Disputed Tiffany Takeover For EU Clearance

PARIS | FRANCE – LVMH said on Friday it had submitted its troubled takeover of Tiffany, which is now at the centre of  a legal dispute between the two groups, for EU approval as it seeks to counter accusations that it deliberately stalled antitrust proceedings. The French group’s $16 billion acquisition of the U.S. jeweler … Continue reading BUSINESS | LVMH Submit Disputed Tiffany Takeover For EU Clearance

TRAVEL | What You Need To Know About Travel Guidelines In Saudi Arabia

The Saudi General Authority of Civil Aviation (GACA) has released its updated traveler’s guide, which accommodates the ongoing pandemic after approving international travel for some exceptional cases. The new regulations entail that non – Saudis who are entering the Kingdom must provide a medical report of their coronavirus disease (COVID-19) test and its negative results, … Continue reading TRAVEL | What You Need To Know About Travel Guidelines In Saudi Arabia

WORLD NEWS | Trump Awards Kuwaiti Emir ‘Prestigious’ Decoration, White House Says

WASHINGTON – U.S. President Donald Trump awarded the U.S. Legion of Merit, Degree Chief Commander, to Kuwaiti Emir Sheikh Sabah al-Ahmed al-Sabah, the White House said in a statement on Friday, adding that it was the first time the honor had been given since 1991. The 91-year-old emir arrived in the United States in July … Continue reading WORLD NEWS | Trump Awards Kuwaiti Emir ‘Prestigious’ Decoration, White House Says

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