Oil giant Aramco reports a record first quarter as oil prices rise

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

Maxim Shemetov | Reuters

Oil giant Aramco reported a more than 80% jump in net profit on Sunday, topping analysts’ expectations and setting a new quarterly record since the IPO.

The Saudi giant said net income rose 82% to $ 39.5 billion in the first three months of the year, up from $ 21[ads1].7 billion in the same period last year. Analysts asked by Reuters had predicted net income of 38.5 billion dollars.

The record quarter for Aramco comes in the middle of a unique quarter for Big Oil, which is benefiting from a sharp increase in oil and gas prices. Aramco said earnings were driven by higher crude oil prices, rising volumes sold and improved downstream margins.

“During the first quarter, our strategic downstream expansion has further developed in both Asia and Europe, and we continue to develop opportunities that meet our growth targets,” Aramco’s President and CEO Amin Nasser said in a statement on Sunday.

“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.”

With a market value of around $ 2.43 trillion on Wednesday, Aramco last week surpassed Apple to become the world’s most valuable company. The companies’ market values ​​looked the same on Sunday.

Aramco shares are up over 15% so far in 2022. In March, the oil giant reported that its full-year result more than doubled last year due to the ongoing rise in oil prices, driven higher by Russia’s invasion of Ukraine, threatening EU sanctions against Russian oil and prospects for tighter supply.

Bonus shares

Aramco’s results reflect an ongoing momentum in the oil and gas industry, which has benefited from a price increase of more than 45% since the beginning of the year. Earnings from Aramco’s global equals such as BP and Shell have reached their highest level in many years, despite write – downs to close down operations in Russia following the invasion of Ukraine.

Aramco rewards investors as a result. The company said it would spend $ 4 billion in retained earnings to distribute bonus shares to shareholders – equivalent to one share for every 10 shares. It also kept its huge dividend stable at $ 18.8 billion, covered by a 68% year-over-year increase in free cash flow to $ 30.6 billion.

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