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Saudi Aramco posts huge quarterly profit despite ongoing oil production cuts

Saudi Aramco’s profit rose 39 percent in the third quarter of 2022, beating the average of analysts’ forecasts. 
Profits at the world’s most profitable oil company rose to SR159 billion ($2 billion) after revenue rose 51 percent to SR5 billion, according to stock market data. 
The oil giant’s net profit was SR152 billion, compared to the SR154 billion forecast by Al Rajhi Capital, according to Bloomberg. 
Aramco said the result was mainly driven by higher oil prices and sales volumes. 


Additionally, this was partially offset by a higher average effective royalty rate due to higher oil prices and increased sales volume, which resulted in higher production license payments. 


Aramco’s strong earnings and record free cash flow in the third quarter reinforce our proven ability to deliver significant value through low-cost, low-carbon upstream and our strategically integrated upstream and downstream businesses,” said CEO Amin Nasser. 


“While continued economic uncertainty has affected global oil prices during this period, our long-term view is that demand for oil will increase over the next decade as the world needs more affordable and reliable energy,” he added. In addition to the strong results, Aramco kept its quarterly dividend stable at SR70.3 billion, which is equal to SR0.3198 per share payable on November 28. 


Investments in the quarter increased from $7.6 billion to $9 billion. Aramco continued to invest and take advantage of growth opportunities. 
Based on nine-month results, Aramco’s profit increased by 68 percent to SR89 billion from SR291 billion a year ago. 


Saudi listed companies increased their revenue to SR 1.57 trillion from SR 9billion in the nine months of 2021. 
Asharq TV oil market analyst Wael Mahdi said oil market analysts played a big role in Aramco’s earnings growth in the third quarter What was surprising was that Aramco reported that Aramco lost revenue in the following quarter when the revenues of the next stage of the production chain increased by 90 percent per year. 


Naif Aldandeni explained How the strong financial performance was helped by the fact that “it was supported by higher prices in a very well-managed market, reflected by OPEC policies”. “It was also a result of Saudi Aramco’s continued execution of its strategy to reduce costs per barrel and provide affordable and efficient production to feed the oil market,” he reveals. 


Fawaz Al-Fawaz, an independent Saudi economist and columnist, told Arab News that “Aramco’s revenues and profits were in line with other international oil companies, while both volumes and prices improved.” This is up from the third quarter of 2021 but down from the previous quarter as the average price fell. ” 


Aramco Shares: Following the announcement, Aramco shares fell 0.14 percent to end Tuesday’s session at SR 34.85 


Highlights 
During the quarter, Aramco produced 14.44mm of hydrocarbons, proving its efficient and reliable operation. As Aramco continues its gas expansion strategy to meet growing domestic demand and grow MSC to 13.0 mmbpd by 2027, the AI will be Aramco’s competitive advantage and support its development in the UK Aramco and the private sector partner launched the quarter during the Global AI Corridor, which supports growth and jobs by building local capacity and nurturing talent, growing Saudi AI startups and attracting impressive venture capital and intellectual property 
 Oil giant Saudi Aramco launched the initiative without support from the UK SME sector with more than SR 3 billion in funding  
 Aramco is said to be considering its unit, Aramco Trading Company, IPan IPO, which could potentially raise more than $30 billion, to become one of the world’s largest exchanges this year. 
Saudi Arabian oil giant Saudi Aramco launched Arabian Rig Manufacturing, a joint venture with America’s NOV, to produce drilling rigs and related equipment for the first time in Saudi Arabia.

Source: Arab news

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