Saudi Aramco has benefited not only from the roughly 45 per cent rise in oil prices so far this year, but also from the gradual increase in production by Saudi Arabia and other OPEC+ members. From January to March, Saudi Aramco produced an average of 10.2 million barrels a day, up 20 per cent from a year earlier.
Saudi Aramco's profits soared as oil prices and production soared.
On Sunday, May 15th, Saudi Aramco, the world's largest oil producer, reported first-quarter results for 2022. According to the financial report, Saudi Aramco's first-quarter revenue was 467 billion rials ($110.35 billion), up 72 per cent from a year earlier, while operating profit was 277.71 billion rials, up 83 per cent from a year earlier.
First-quarter net profit (including minority stakes) was 148 billion rials (about $39.47 billion), compared with 81.44 billion rials ($21.7 billion) in the same period last year, up 82% from the same period last year and 21.9% higher than in the fourth quarter of 2021.
Saudi Aramco's first-quarter net profit is expected to be $38.5 billion, according to the median estimate of 12 analysts provided by the company.It was also the highest profit on record since it went public after oil prices soared as a result of the crisis in Russia and Ukraine.
Saudi Aramco's shares hit an all-time high on May 11, with a market capitalization of about $2.43 trillion, surpassing Apple Inc to become the world's most valuable listed company for the first time since 2020. Profits of global energy companies such as BP P.L.C. and Shell have risen to their highest level in at least a decade, driven by rising commodity prices. Like them, Saudi Aramco's performance was driven by a surge in crude oil prices after the Russian-Ukrainian crisis escalated at the end of February.
At the end of the first quarter, the price of benchmark Brent crude rose nearly 70 per cent from the end of March 2021 to $107.91 a barrel and has so far been trading at $111.19.
In addition, the company has benefited not only from the about 45 per cent rise in oil prices so far this year, but also from the gradual increase in production by Saudi Arabia and other OPEC+ members.From January to March, Saudi Aramco produced an average of 10.2 million barrels a day, up 20 per cent from a year earlier.
At the end of 2019, Saudi Aramco went public in Riyadh, raising nearly $30 billion and selling 1.7 per cent of its shares mainly to the Saudi public and regional institutions.The company said its net profit was the highest since it went public, with profit growth in the first quarter mainly due to higher crude oil prices and sales, as well as improved profit margins in refinery processing and sales divisions.
According to Reuters, Yousef Husseini, deputy director of equity research at EFG Hermes, said:
We believe that Brent crude prices will fall in the second half of this year, so we expect Saudi Aramco's net profit to fall back and peak in the second quarter.
The company's dividend remained unchanged at $18.8 billion in the second quarter.In line with market expectations and approve the distribution of one dividend for every 10 shares Saudi Aramco also said its downstream profit margins improved in the first quarter and was looking for opportunities to develop downstream sectors.
Saudi Aramco CEO Amin Nasser said in a statement:
In the first quarter, we made further progress in our strategic downstream expansion in Asia and Europe, and we continued to develop opportunities to complement our growth targets.
The company's shares have risen 25 per cent since the end of 2021, outpacing the nearly 14 per cent rise in the Saudi benchmark index.
Edit / lydia