Saudi Aramco profit jumps 82% in first quarter on high oil prices

0
173

A scenic view of the Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. Reuters

Saudi Aramco on Sunday posted an 82 per cent jump in first quarter profits, buoyed by a global surge in oil prices that has made it the world’s most valuable company.

The announcement continued a string of recent positive economic news for Saudi Arabia, where a booming oil sector is fuelling the fastest growth rate in a decade.

Aramco’s net income of $39.5 billion was up from $21.7 billion compared with the same period in 2021, “primarily driven by higher crude oil prices and volumes sold, and improved downstream margins,” it said in a press release.

The latest financial results were published four days after Aramco dethroned Apple as the world’s most valuable company, with shares worth $2.42 trillion compared to Apple’s $2.37 trillion.

In March, Aramco reported a 124 per cent net annual profit increase for 2021.

Also on Sunday, Aramco announced it was issuing 20 billion bonus shares to shareholders — one share for every 10 shares already owned.

A dividend of $18.8 billion will be paid in the second quarter, it said.

“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,” Aramco president and CEO Amin Nasser said.

In early May, Saudi Arabia reported its fastest economic growth rate in a decade, as a booming oil sector fuelled a 9.6 per cent rise in the first quarter over the same period of 2021.

Saudi Arabia’s GDP is expected to grow by 7.6 per cent in 2022, the International Monetary Fund said in April.

Saudi Arabia has sought both to open up and diversify its oil-reliant economy, especially since Mohammed Bin Salman’s appointment as crown prince in 2017.

Aramco floated 1.7 per cent of its shares on the Saudi bourse in December 2019, generating $29.4 billion in the world’s biggest initial public offering.

In February, the kingdom shifted four per cent of Aramco shares, worth $80 billion, to the country’s sovereign wealth fund — a move analysts saw as a possible prelude to further opening up the oil giant.

Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef said recently that the ministry has a goal to attract investments worth $32 billion to its mining and minerals sector through nine new projects, state news agency SPA reported.

The Kingdom is seeking to diversify its economy away from oil by investing hundreds of billions of dollars into a plan called Vision 2030.

The projects are aimed at supporting supplies of mineral products to local and international markets, according to SPA.

Alkhorayef added that the ministry is currently studying 145 applications for exploration licenses from foreign companies, SPA said.

The minister said the projects would create over 14,500 jobs and added the ministry is now processing 145 exploration license applications from foreign companies.

The Saudi General Authority for Statistics (GASTAT) has recently published on its website flash estimates of the Saudi Gross Domestic Product (GDP) growth rate for the first quarter of 2022.

The flash estimates revealed that the Saudi GDP has made the highest growth rate in the past 10 years, achieving a growth rate of 9.6 per cent during the first quarter of 2022, compared to the same period in 2021, driven by a significant increase in oil activities by 20.4 per cent, in addition to an increase in non-oil activities by 3.7 per cent and an increase in government services activities by 2.4 per cent.

According to the Saudi Press Agency (SPA), the results published by GASTAT showed that the seasonally adjusted real GDP in the Kingdom grew by 2.2 per cent in the first quarter of 2022 compared to the previous year. This increase was due to the positive growth in oil activities by 2.9 per cent, and an increase in non-oil activities by 2.5 per cent, while government services activities decreased by 0.9 per cent.

PIF launches company: Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), said on Sunday it had launched a coffee company to promote the kingdom’s coffee beans.

The Saudi Coffee Company will provide support to the national coffee industry through the entire supply chain, from bean to cup, the PIF said.

It will also play a key role in developing production in the southern Jazan region, home to the Coffea Arabica, it said.

The Saudi Coffee Company is expected to invest nearly 1.2 billion riyals ($319 million) over the next 10 years in the national coffee industry, to help boost annual production from 300 tonnes to 2,500 tonnes.

LEAVE A REPLY

Please enter your comment!
Please enter your name here