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State-owned Saudi Aramco raised its dividend despite profits falling to $121 billion in 2023, down from a record $161 billion in 2022, as falling oil prices and state-led production cuts weighed on results.

The energy group said net profit in the final three months of the year was in line with analysts' average forecast of $26.7 billion. Although the full-year figure was down 24.7% from 2022, profits still exceeded the $111 billion reported in 2021 and were the second-highest on record.

Saudi Aramco said it would increase quarterly dividend payments by 4% year-on-year to $20.3 billion and pay an additional $10.8 billion in performance-related dividends. The company introduced a performance dividend in the second quarter last year to boost shareholder returns, particularly the state and Saudi sovereign wealth funds, which own 82% and 16% of the company respectively.

Saudi Aramco's total dividends this year increased 30% from 2022 to $97.8 billion.

The spending remains the most important source of revenue for Crown Prince Mohammed bin Salman, who hopes to use oil profits to fund an ambitious plan to modernize the kingdom and diversify its economy.

The company's total capital expenditures in 2023 will be $49.7 billion, compared with $37.6 billion in 2022. Operating free cash flow was $101.0 billion, compared with $148.5 billion in 2022 and $107.5 billion in 2021.

Saudi Aramco said it produced an average of 12.8 million barrels per day of crude oil and other liquids last year, compared with 11.5 million barrels per day in 2022.

Saudi Arabia has reduced its own oil production by about 2 million barrels per day over the past 18 months in a series of production cuts with other OPEC+ members in an attempt to support oil prices. Last month, the company abandoned a multibillion-dollar investment plan to further increase maximum production capacity to 13 million barrels per day by 2027.