On Sunday, Saudi Arabian oil behemoth Aramco has reported an 80-plus percent increase in its net profit, exceeding the expectations of analysts and setting a record for quarterly earnings since going public.
The company’s net income rose to $39.5 billion between January and March, an 82 percent increase. The number is $21.7 billion higher than last year at the same time. Analysts had predicted a net income of $38.5 billion.
The oil and gas industry has seen increasing momentum of late, benefitting from a 45-plus percent increase in oil prices since early 2022.
Aramco attributed its higher earnings to elevated crude oil prices, better downstream margins, and more volumes of oil sold.
Aramco CEO and President Amin Nasser said, “During the first quarter, our strategic downstream expansion progressed further in both Asia and Europe, and we continue to develop opportunities that complement our growth objectives. 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.”
As of Wednesday, May 11, 2022, Aramco had a market cap of approximately $2.43 trillion. The oil company passed up Apple and became the most valuable company in the world last week. By Sunday, both companies had similar market caps.
Competitors Shell and BP have also hit record-high levels, even though they’ve had write-downs due to bowing out of their Russian operations.
So far in 2022, Aramco stock is 15 percent higher. The oil company reported in March that it had more than doubled its full-year profit in 2021 because of the rise in oil prices.
Aramco said it would distribute bonus shares to its shareholders from the $4 billion in retained earnings. The amount equals one share for 10 shares held. The company has kept its dividend at $18.8 billion. The oil conglomerate has had a 68 percent increase year-to-year in free cash flow, equaling $30.6 billion.