Oil giant Saudi Aramco said on Sunday its profits soared more than 80% in the first three months of the year as the state-backed company took advantage of volatility in global energy markets and of the oil price spike following Russia’s invasion of Ukraine.
Windfall first-quarter earnings from the company formerly known as Saudi Arabian Oil Co., which overtook Apple as the world’s most valuable company last week, show record net profit of $39.5 billion , up from $21.7 billion in the same period last year.
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The figure marks the oil group’s highest quarterly profit since 2019, when the Saudi government, which owns 98% of the company, listed part of its value on Riyadh’s Tadawul stock exchange in what was then the biggest offering. initial public ever made in the world.
In a statement, Aramco’s chief executive attributed the rise in profits to higher prices as well as increased production from the kingdom, as well as allies in the group known as OPEC Plus. He also seemed to suggest that the disruption of the war in Ukraine had underscored the vital role of oil and gas companies like Aramco.
“Amid heightened global market volatility, we remain focused on meeting global demand for reliable, affordable and increasingly sustainable energy,” said Chairman and CEO Amin H. Nasser. , adding that Aramco was growing. its maximum production capacity to meet the anticipated growth in demand.
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Oil prices hit a 14-year high of $139 a barrel in March immediately following Russia’s invasion of Ukraine, although they subsequently fell as Russian oil continued to sink and new blockages were hurting demand for hydrocarbons in China, one of the main importers. International benchmark Brent traded above $111 a barrel on Sunday.
Shares of Aramco jumped 1.85% on the earnings report on Sunday, with a share priced at 41.40 Saudi riyals, or $11.04 on the Tadawul stock market. Aramco shares have soared year-to-date, making it the world’s most valuable company last week with a market capitalization of around $2.43 trillion.
The oil company said it maintained its cash dividend of $18.8 billion for the fourth quarter of last year, completing one of the world’s largest full-year cash dividends. The payment is a crucial source of revenue for the Saudi government.
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Gearing, which the company defines as the degree to which its operations are financed with debt, fell from 14% at the end of last year to 8% in the first quarter.
The strong quarterly results come after the recovery in economic activity and the easing of global coronavirus restrictions had already produced record annual results for the state-backed company last year following the devastation of the pandemic and the years of slow growth at relatively lower prices.
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Soaring oil prices have given a welcome boost to the Saudi economy.
Saudi Arabia – the world’s biggest oil exporter and de facto leader of OPEC – recorded its fastest economic growth in a decade during the first quarter of the year, as its gross domestic product increased by 9.6 % compared to the same period last year, according to its statistics. agency. The International Monetary Fund expects the kingdom’s economy to grow by 7.6% this year.