Oil giant Aramco reports record first quarter as oil prices soar

The Saudi Aramco logo is displayed at the oil facility in Abqaiq, Saudi Arabia, on October 12, 2019.

Maxim Shemetov | Reuters

Oil giant Aramco reported a more than 80% rise in net profit on Sunday, beating analysts’ expectations and setting a new record for quarterly earnings since its IPO.

The Saudi Arabian giant said net income rose 82% to $39.5 billion in the first three months of the year, up from $21.7 billion in the same period last year. Analysts polled by Reuters had forecast a net profit of $38.5 billion.

The record quarter for Aramco comes amid a breakout quarter for Big Oil, which is benefiting from a sharp rise in oil and gas prices. Aramco said its profit was boosted by higher crude prices, higher volumes sold and better downstream margins.

“During the first quarter, our strategic downstream expansion advanced further in both Asia and Europe, and we continue to develop opportunities that complement our growth objectives,” Aramco Chairman and CEO Amin Nasser said in the earnings release. Sunday.

“In the context of increased volatility in global markets, we remain focused on helping meet the world’s demand for energy that is reliable, affordable and increasingly sustainable.”

With a market capitalization of about $2.43 trillion on Wednesday, Aramco overtook Apple last week to become the world’s most valuable company. Market capitalizations of companies looked similar on Sunday.

Aramco shares are up more than 15% so far in 2022. In March, the oil giant reported that its profit for all of last year more than doubled due to the continued rise in oil prices, driven higher by the Russian invasion of Ukraine, which is looming in the European Union. sanctions on Russian oil and the prospect of more limited supply.

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Aramco’s results reflect continued momentum in the oil and gas industry, which has benefited from a more than 45% increase in prices since the beginning of the year. Earnings at Aramco’s global peers such as BP and Shell hit their highest level in years, despite incurring write-downs from the exit of operations in Russia after the Ukraine invasion.

As a result, Aramco is rewarding investors. The company said it would use $4 billion in retained earnings to distribute bonus shares to shareholders, equal to one share for every 10 shares owned. It also held its huge dividend steady at $18.8 billion, covered by a 68% year-over-year increase in free cash flow to $30.6 billion.

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