Thursday, 9 December, 2021
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Aramco profit surges on higher oil prices

Aramco profit surges on higher oil prices

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RIYADH: Saudi Aramco, the world’s largest oil-exporting company, said third-quarter profit more than doubled on higher oil prices and improved refining margins.

Net profit in the three-month period to the end of September increased to $30.43 billion, from $11.8bn in the same period a year ago, the company said in a regulatory filing to the Tadawul stock exchange, where its shares are traded, report agencies.

The results beat the average $28.4bn estimate of four analysts polled by Reuters and exceeded the forecast of investment bank EFG-Hermes forecast by 7 per cent.

Net profit increased 19.5 per cent from the second quarter of this year. Aramco said it will pay a third-quarter dividend $18.8bn in the fourth quarter of the year.

Oil prices have rallied this year amid a global energy crunch and rising demand. Brent, the international benchmark under which two thirds of the world’s oil is traded, has rallied about 62 per cent this year and ended trading at $83.70 on Friday. West Texas Intermediate, the gauge that tracks US crude, has increased about 73 per cent so far and ended trading last week at $83.57.

“Our exceptional third-quarter performance was a result of increased economic activity in key markets and a rebound in energy demand, as well as our unique low-cost position, our financial discipline and our proven ability to reliably deliver essential energy and chemical products to our customers,” Aramco president and chief executive Amin Nasser said. Net income for the first nine months more than doubled to $77.6bn from $35.02bn in the same period in 2020. The strong results helped Aramco reduce gearing to 17.2 per cent, from 23 per cent, at the end of 2020. The company’s share price rose 1.4 per cent to 38.3 riyals ($10.2) in early trading on Sunday following the results announcement.

“Some headwinds still exist for the global economy, partly due to supply chain bottlenecks, but we are optimistic that energy demand will remain healthy for the foreseeable future,” Mr Nasser said.

Aramco’s cash flow was $28.7bn in the third quarter, compared to $12.4 billion for the same period in 2020. The company said capital expenditure rose to $7.6bn in the third quarter, up 19 per cent from the same period a year earlier, due to ongoing crude oil increments and other development projects.