The Saudi Aramco logo is depicted at the oil factory in Abqaiq, Saudi Arabia October 12, 2019.
Maxim Shemetov | Reuters
Oil giant Aramco reported an increase in net profit of more than 80% on Sunday, surpassing analyst expectations and setting a new quarterly record since its IPO.
The Saudi Arabian behemoth said net income rose 82% to $39.5 billion in the first three months of the year, up 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 standout quarter for Big Oil, which is benefiting from a sharp rise in oil and gas prices. Aramco said its revenues were driven by higher crude oil prices, increasing volumes sold and improved downstream margins.
“During the first quarter, our strategic downstream expansion continued in both Asia and Europe, and we continue to develop opportunities that complement our growth targets,” said Aramco President and CEO Amin Nasser in Sunday’s earnings release.
“Against the backdrop of increased volatility in global markets, we remain focused on helping meet global energy demands that are reliable, affordable and increasingly sustainable.”
With a market cap of about $2.43 trillion on Wednesday, Aramco surpassed Apple as the world’s most valuable company last week. The market caps of the companies looked about the same on Sunday.
Aramco shares are up more than 15% so far in 2022. In March, the oil giant reported that its full-year profits more than doubled last year as a result of the continued rise in oil prices, which was bolstered by the Russian invasion of Ukraine, the looming European Union sanctions against Russian oil and the prospect of a tighter supply.
Aramco said cash flow from operating activities was $38.2 billion in the first quarter, compared to $26.5 billion in the same period last year. Free cash flow increased 68% year-over-year to $30.6 billion, which it says will allow it to pay a $18.8 billion dividend to shareholders.
Aramco also said it would use $4 billion in retained earnings to pay out bonus shares to shareholders — equivalent to one share for every 10 shares held.