Happy Sunday everyone!

Aramco reported a nearly 5% dip in Q1 profit as lower oil prices and rising costs pressured margins, though it still beat analyst forecasts. In Dubai, the iconic Palazzo Versace hotel is back on the auction block, now with a significantly reduced starting bid of AED 600 million. Meanwhile, Dubai ranked 5th in the inaugural Tier-1 City Index by Driven | Forbes Global Properties, outperforming peers in infrastructure and global appeal.

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Aramco Profit Drops Nearly 5% Amid Lower Oil Sales And Rising Costs

📰 What’s it about:

• Saudi Aramco reported a 4.6% drop in first-quarter net profit, posting 97.54 billion riyals ($26.01 billion) for Q1 2025.

• Despite the decline, the profit beat analysts’ expectations of $25.36 billion, according to a median estimate from 16 analysts.

• The decline was driven by lower sales and higher operating costs, while free cash flow fell 15.8% to $19.2 billion.

• Total dividends for the quarter stood at $21.36 billion, including $219 million in performance-linked payouts, a sharp reduction from last year’s $43.1 billion.

💸 Why it matters:

• Aramco remains central to Saudi Arabia’s economy, with oil revenues making up 62% of government income in 2024.

• The drop in oil prices—with Brent crude falling from a high of $82.03 in January to $63.91—has squeezed margins and state revenues.

• The Saudi government relies heavily on Aramco’s payouts to fund Vision 2030 projects and diversification plans, especially as free cash flow tightens.

• The firm’s lowered dividend outlook for 2025 ($85.4B) reflects broader economic caution, down significantly from $124B paid out based on 2023–24 earnings.

🚀 What’s next:

• Aramco is ramping up capital expenditure, which rose nearly 16% year-on-year in Q1 to $12.5 billion, with annual investments planned between $52B and $58B.

• With oil price volatility expected to continue amid global trade tensions and economic uncertainty, Aramco will emphasize cost discipline and long-term planning.

• As the kingdom gears up to host the 2034 FIFA World Cup, fiscal pressure may rise; resources are being reallocatedto prioritize infrastructure projects.

• The company’s resilient, low-cost operating model will be tested as it supports both shareholder returns and Saudi Arabia’s non-oil transformation agenda.

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At ODEUM, we provide end-to-end media solutions to elevate your brand across multiple platforms.

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Markets

Palazzo Versace Dubai Back On Auction Block At Deep Discount

🗞️ What It’s About

• Dubai’s Palazzo Versace hotel has returned to the auction market, now with a significantly reduced starting bid of AED 600 million.

• This marks a dramatic drop from its earlier listing price of AED 1.3 billion when it was first put up for sale over a year ago.

• Despite several past auction attempts and fluctuating price tags, no successful bids have materialized.

• The current auction does not include the 169 residential units associated with the broader development.

💡 Why It Matters

• The reduced bid suggests creditor urgency, with banks likely seeking a quick resolution to recover debts tied to the property.

• Palazzo Versace holds iconic status in Dubai’s luxury hospitality sector and continues to enjoy strong occupancy, especially during peak seasons.

• The property is located in Al Jaddaf, one of Dubai’s key real estate zones, and has long been considered a flagship project.

• A successful sale could signal a positive turn for Dubai’s debt-burdened legacy real estate assets, amid wider efforts by developers like Union Properties to clean up balance sheets.

🔜 What’s Next

• The auction will remain open for 11 days, with market watchers closely monitoring if the new low price triggers serious investor interest.

• If sold, the deal would be a milestone moment for Dubai’s distressed property sector, setting a precedent for debt resolution through asset liquidation.

• Analysts say the outcome could impact pricing strategies for other high-end real estate assets facing similar financial strain.

• Meanwhile, Union Properties continues to offload debt, announcing repayments of Dh179 million in Q1 2025, with another Dh159 million planned in Q2.

Dubai Ranks 5th In Global Tier-1 City Index, Surpassing Major Global Hubs In Infrastructure And Appeal

🗞️ What It’s About:

• Dubai placed 5th among seven global cities in the inaugural Tier-1 City Index by Driven | Forbes Global Properties, released in May 2025.

• The index benchmarks Dubai against Singapore, Sydney, London, New York, Hong Kong, and Paris, using 28 indicators across six categories: Infrastructure, Governance, Economy, Safety, Quality of Life, and Global Appeal.

• Dubai stood out in Infrastructure (2nd) and Global Appeal (3rd), thanks to its world-class airport, logistics, and robust tourism sector.

• The report is the first of its kind by a UAE-based brokerage, aiming to provide a data-driven lens on urban competitiveness.

💡 Why It Matters:

• Dubai’s strong showing in key categories confirms its rising status as a globally competitive city, especially in logistics, safety, and quality of life.

• The city ranked 4th in both Safety and Quality of Life, supported by a secure environment, strong healthcare, and educational services.

• According to Driven CEO Abdullah Alajaji, the goal is to move beyond market noise and ground the conversation in long-term vision and global benchmarks.

• The index offers a strategic lens for policymakers and investors to assess Dubai's position and potential trajectory in the global urban hierarchy.

🔜 What’s Next:

• Investor sentiment shows Dubai may be entering a mature pricing phase, with 43% saying property prices are fairly valued and 11% seeing them as undervalued.

• The report calls for real-time tracking of supply and demographic trends to avoid imbalances and maintain stability in the real estate market.

• Singapore and Sydney topped the index, but Dubai’s progress indicates it is closing the gap with long-established Tier-1 cities.

• With $207.2 billion in real estate transactions in 2024, and a record 2.78 million deals, Dubai’s property sector is positioned for continued growth—if managed prudently.

🔍From Smashi Business’ Desk

• Women are leading the way in Saudi Arabia’s hospitality sector.

🔍In other news…

• UAE’s role as Guest of Honour at Arab Media Forum reflects progress of its advanced, AI-driven media sector.

• Here Are 9 Companies Expected To List On Saudi Market By End Of May.

• Abu Dhabi's AD Ports Posts 18% Growth In Q1 Revenue To $1.3B On Broad-Based Growth Across Business Units.

• Dubai Investments Reports 49% Jump In Q1 Profit On Higher Rental Income.

• Dubai’s Parkin drives $37.2 million net profit in Q1 2025 amid expansion.

• Ras Al Khaimah real estate: RAK Properties reports $100.7 million Q1 revenue, with over 3,000 units under construction.

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