Aramco beats forecasts with $40bn profit; highest quarterly since listing

Company says results ‘driven by higher crude oil prices, volumes sold’

Saudi Aramco’s profit has surged 82 percent in the first quarter of 2022, beating the median of analysts’ expectations with the highest quarterly profit since it went public in 2019.

Profits of “the most profitable oil company in the world” hit SR148 billion ($40 billion) after revenue almost doubled to SR467 billion, according to a bourse filing.

This is up from SR121 billion in the fourth quarter and SR81 billion in the first quarter of 2021.

The crude producer said the results were “primarily driven by higher crude oil prices and volumes sold, and improved downstream margins.”

Aramco also maintained stable quarterly dividends at $18.8 billion and approved the issuance of one bonus share for every ten shares held at a total value of $4 billion.

Capital expenditure during the quarter stood at $7.6 billion and Aramco expects expenditure to grow further until around the middle of the decade in support of its long-term strategy.

“Against the backdrop 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,” said CEO Amin Nasser, commenting on the results.

“During the first quarter, our strategic downstream expansion progressed further in both Asia and Europe, and we continue to develop opportunities that complement our growth objectives,” he added.

Along with strong financial results,

Aramco has recently been in a race with Apple Inc. for the world’s most valuable company, with the tech major being pressured by rising inflation.

Strong oil prices drove the crude giant to claim the top position globally in terms of market cap as its shares hit record levels on May 11 to yield a valuation of $2.43 trillion.

The company’s rating has been revised by Fitch this year to positive from stable, with a credit profile of AA+.

Increase in capital

Saudi Aramco shareholders approved the company’s capital increase to SR75 billion from SR60 billion.

The oil giant will issue bonus shares to capitalize SR15 billion from its retained earnings, according to a bourse filing.

Aramco seeks to maximize total shareholder return through the distribution of sustainable and progressive dividends, underlying growth in free cash flow and investing in available strategic opportunities to create long-term value, it said in a statement.

We remain focused on helping meet the world’s demand for energy that is reliable, affordable, and increasingly sustainable. Amin Nasser CEO

Shares jump 4.2%

Shares of Saudi Aramco surged 4.2 percent at Sunday’s close. In response to the results, shares reached SR42.35 at the closing bell, amid a race with Apple Inc. for the world’s top-valued firm spot.

With the tech major being pressured by rising inflation, strong oil prices drove state-owned Aramco to claim the top position globally in terms of market cap last week.