Saudi Aramco sets share sale stage with $47 billion profit

Tue, 2019-08-13 02:19

DUBAI: Saudi Aramco proved itself the most profitable company in
history on Monday with financial figures that beat all its
competitors by a long way.

The Kingdom’s oil giant reported net income of $46.9 billion
for the first half of 2019, way ahead of the $31.5 billion reported
by the next biggest earner, Apple. Aramco’s profits are nearly 50
percent higher than those of the five largest Western oil companies
combined.

It was the first time Aramco — a private company owned by the
Kingdom — had disclosed its financial strength in a formal
results announcement, and followed the unprecedented level of
financial information disclosed in April, when it broke world
records in the bond markets with a much-in-demand $12 billion
issue.

The company also underlined that it was ready to go to
international stock markets in an initial public offering (IPO) of
shares whenever the Kingdom thought conditions were right. Some
experts think the IPO could happen next year — earlier than many
analysts had predicted.


Saudi Aramco’s president and CEO, Amin al-Nasser. (AFP file
photo)

Amin Nasser, the president and chief executive of Aramco, said
the company’s profits — lower than in the same period last year
— were earned against a background of tough conditions in the
global energy market.

“Despite lower oil prices during the first half of 2019, we
continued to deliver solid earnings and strong free cash flow
underpinned by our consistent operational performance, cost
management and fiscal discipline,” he said in a formal statement
to the London Stock Exchange, where Aramco’s bonds are
listed.“Our financials are strong and we continue to invest for
future growth.”

 

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The profit announcement came at the start of a busy day for
Aramco. It also announced a planned investment in the
petrochemicals and refining business of the Indian comglomerate
Reliance Industries. There was speculation about Aramco buying a 20
per cent stake in the business for about $15 billion, but Khalid
Al-Dabbagh, Aramco’s chief financial officer, declined to confirm
those figures and said the talks with Reliance were at “an early
stage.”

Al-Dabbagh was speaking on a conference call with investment
analysts — another first for Aramco — in which he also revealed
that the upgrade to the Kingdom’s east-west pipeline, aiming to
increase capacity on the route from 5 million to 7 million barrels
per day amid security concerns in the Arabian Gulf, would be
finished next month.

Dividend payments to the Kingdom amounted to $46.4 billion in
the first half of 2019, including a “special dividend” of $20
billion “refecting the exceptionally strong financial performance
the company delivered in 2018.”

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Source: FS – All-News-Economy
Saudi Aramco sets share sale stage with billion profit