Saudi Aramco's profit rises in the first quarter boosted by oil prices

Saudi Aramco’s profit rises in the first quarter boosted by oil prices

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Saudi Aramco on Sunday announced an 82% rise in its first-quarter net profit, fueled by surging oil prices that propelled the Saudi energy giant into the world’s largest market capitalization rank.

Its net income was $39.5 billion, compared to $21.7 billion in the same period in 2021, “mainly due to higher crude oil prices and volumes sold, and better downstream margins (refining and distribution). , editor’s note),” Saudi Aramco said in a press release. release.

This is a record since the IPO of the world’s largest oil exporter in 2019.

The jump in profits comes on the heels of a string of favorable economic news for Saudi Arabia, where the burgeoning oil sector is supporting the fastest rate of growth in a decade.

Aramco’s latest financial results were released four days after the company dethroned Apple as the world’s most valuable company, with shares worth $2.43 trillion to the US company’s $2.37 trillion. .

In March, the Saudi giant announced a 124% increase in net profit in 2021 compared to the previous year.

Growth of 9.6% in the first quarter

However, the company, a flagship of the kingdom and a key source of revenue for the state, faces security concerns related to the war being waged by the Saudi-led military coalition against Houthi rebels in Yemen, who have repeatedly attacked the kingdom.

In 2019, airstrikes claimed by the Houthis on two Aramco facilities in eastern Saudi Arabia temporarily halted half of the kingdom’s crude output.

In March, a Houthi attack on Aramco facilities caused a “temporary” drop in production.

The oil giant also announced on Sunday that it will increase its capital by issuing 20 billion shares distributed free of charge to shareholders, based on the ratio of one share offered for ten held.

A dividend of $18.8 billion will be paid in the second quarter, it also said.

“Amid increased volatility in global markets, we remain committed to meeting the world’s demand for reliable, affordable and increasingly sustainable energy,” said Amin Nasser, president and chief executive officer of Aramco.

In early May, Saudi Arabia posted its highest growth rate in a decade, as a booming oil sector fueled a 9.6% rise in the first quarter compared to the same period in 2021.

Expected GDP increase of 7.6%

The biggest oil exporter has resisted US demands to increase production in a bid to contain prices that have soared since the start of Russia’s war in Ukraine.

In this context, Saudi Arabia and the United Arab Emirates have marked their commitment to the Organization of Petroleum Exporting Countries (OPEC), led by Riyadh and Moscow, thus underlining their growing independence from their traditional US ally.

Saudi Arabia’s gross domestic product (GDP) is expected to grow 7.6% in 2022, the International Monetary Fund (IMF) estimated in April.

The kingdom has sought to both open up and diversify its oil-dependent economy, particularly since the appointment of Mohammed bin Salman as crown prince in 2017.

Aramco listed 1.7% of its shares on the Saudi Stock Exchange in December 2019, raising $29.4 billion (€26.5 billion), the largest initial public offering in history.

In February, the kingdom transferred 4% of Aramco shares, worth $80 billion, to the country’s sovereign wealth fund, a move seen as a possible prelude to further opening by the oil giant.

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