Aramco Sets New Quarterly Earnings Record

Aramco Sets New Quarterly Earnings Record
Saudi Aramco revealed that it set a new quarterly earnings record.

Saudi Aramco revealed that it set a new quarterly earnings record, since its initial public offering in 2019, in the first quarter of this year.

The company’s net income in 1Q rose 82 percent year on year, from $21.7 billion in 1Q 2021 to $39.5 billion in 1Q 2022, its latest financial results statement showed. This was primarily driven by higher crude oil prices and volumes sold, and improved downstream margins, according to Aramco’s results statement.

Cash flow from operating activities was said to be $38.2 billion in the first quarter, compared to $26.5 billion in 1Q 2021, and free cash flow is said to have increased by 68 percent year on year to $30.6 billion. Aramco’s gearing ratio reduced to eight percent as of March 31, 2022, from 14.2 percent as of December 31, 2021, as a result of higher cash and cash equivalents, primarily attributable to stronger operating cash flows and cash proceeds in connection with Aramco’s gas pipeline transaction, the company highlighted.

Aramco confirmed that it paid its 4Q 2021 dividend of $18.8 billion in the first quarter of 2022 and outlined that its 1Q 2022 dividend of $18.8 billion will be paid in the second quarter of this year. First quarter capital expenditure was said to be $7.6 billion and Aramco continues to expect capital expenditure to grow until around the middle of the decade.

“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,” Aramco President and CEO Amin H. Nasser, said in a company statement.

“Energy security is vital and we are investing for the long term, expanding our oil and gas production capacity to meet anticipated demand growth and creating long-term shareholder value by capitalizing on our low lifting cost, low upstream carbon intensity, and integrated downstream business,” Nasser added in the statement.

“As we collaborate with domestic and international partners to explore new and emerging technologies and solutions, from developing cleaner transport technologies to establishing low-carbon hydrogen and ammonia value chains, I am more optimistic than ever about the positive contribution we can make, both to our customers and to the ongoing global energy transition,” Nasser continued.

At the time of writing, Saudi Aramco is the largest company by market cap, according to companiesmarketcap.com, a list of the world’s largest companies by market capitalization which excludes non-publicly traded companies and updates rankings daily.

The list showed on Monday that Aramco had a market cap of $2.51 trillion, while second placed Apple had a market cap of $2.38 trillion and third placed Microsoft had a market cap of $1.95 trillion. Aramco recently overtook Apple to claim first place on the list.

Back in March, Aramco announced in its full-year 2021 financial results that its net income more than doubled year on year to $110 billion. Cash flow from operating activities for the year hit $139.4 billion, compared to $76.1 billion in 2020, and free cash flow came in at $107.5 billion, compared to $49.1 billion in 2020.

“Our strong results are a testament to our financial discipline, flexibility through evolving market conditions and steadfast focus on our long-term growth strategy, which targets value growth for our shareholders,” Nasser said in a company statement at the time.

To contact the author, email andreas.exarheas@rigzone.com


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