Oil giant Aramco reports record first quarter as oil prices soar

The Saudi Aramco logo is pictured at the oil facility in Abqaiq, Saudi Arabia, October 12, 2019.

Maxim Chemetov | Reuters

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

The Saudi giant said its net profit rose 82% to $39.5 billion in the first three months of the year, from $21.7 billion in the same period last year. Analysts polled by Reuters had forecast net profit of $38.5 billion.

The record quarter for Aramco comes amid a stellar quarter for Big Oil, which is benefiting from a sharp rise in oil and gas prices. Aramco said its earnings were driven by higher crude oil prices, higher volumes sold and improved downstream margins.

“During the first quarter, our strategic downstream expansion further advanced in Asia and Europe, and we continue to develop opportunities that complement our growth objectives,” Aramco Chairman and Chief Executive Officer said Sunday. Amin Nasser, in the publication of the results.

“Amid heightened global market volatility, we remain focused on meeting global demand for reliable, affordable and increasingly sustainable energy.”

With a market capitalization of around $2.43 trillion on Wednesday, Aramco overtook Apple last week to become the world’s most valuable company. Company market capitalizations were similar on Sunday.

Aramco stock is up more than 15% so far in 2022. In March, the oil giant announced that its annual profit from last year had more than doubled due to the continued rise in oil prices , driven up by the Russian invasion of Ukraine, which threatens the European Union. sanctions on Russian oil and the prospect of tighter supplies.

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Aramco’s results reflect continued momentum in the oil and gas industry, which has benefited from a price increase of more than 45% since the start of the year. Earnings for Aramco’s global peers such as BP and Shell hit their highest levels in years, despite writedowns incurred for exiting operations in Russia after the invasion of Ukraine.

Aramco thus rewards investors. The company said it would use $4 billion in retained earnings to distribute free shares to shareholders, or one share for every 10 shares held. It also kept its huge dividend steady at $18.8 billion, covered by a 68% year-over-year increase in free cash flow to $30.6 billion.

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