• Aramco's profit jumps 740% in two years, assets and revenues are trillions



    * Ikrami Abdullah from Riyadh


    Saudi Aramco, the world's largest oil company, surged 46.3 percent to SAR 416.5 billion, or SAR 131.9 billion in 2018 (111.1 billion dollars), compared with 284.6 billion riyals in 2017.

    While its profits jumped nearly 740 per cent (SR 366.8 billion) in two years, after it was 49.7 billion riyals in 2016.

    According to the analysis of the reports' unit in the newspaper "AlEqtisadiah" that was based on the company's prospectus, the company's high revenue and profits in 2018 set at the top of corporate profits in the world as a result of the rise in the average selling price of crude by 33 per cent to $ 70 per barrel compared to $ 52.7 per barrel in 2017.

    Saudi Aramco's earnings last year were double the earnings of Apple (the world's second-largest company after Aramco) that has lost $ 59.4 billion.

    Aramco's profits are more than the second and third largest in the world combined "Apple and China" with $ 45.2 billion industrial and commercial bank and reaching $ 104.6 billion.

    In addition, Aramco has more than the five biggest oil companies in the world, Exxon Mobil and Chevron, British Petroleum, Total and the Royal Dutch Shell, whose combined profits are $ 80 billion.

    Aramco's profit in 2018 is about four times that of the world's largest oil company, Royal Dutch Shell, of ($ 23.4 billion) in the same year.

    The company's profits are nearly four times higher (3.9 times) than Saudi companies listed in the stock market in 2018, amounting to 28.3 billion dollars (106 billion riyals).

    The company's financial statements indicate an increase in its assets and revenues to trillions, with revenue reaching 1.18 trillion riyals in 2018.

     Assets rose to 1.35 trillion riyals at the end of last year.


    As for the company's revenues, it increased by 65.7 percent (SR 331.4 billion) in 2017 to SR 836 billion compared to SR 504.6 billion in 2016 and then rose by 41.4 percent (SR 346.2 billion) in 2018 to SR 1.18 trillion.

    While it is jumping by 134.3 per cent, equivalent to 677.5 billion riyals in two years (2018 compared to 2016).

    Aramco's assets rose by 17.2 percent (SR 161.9 billion) in 2017 to SR 1.1 trillion compared to SR 940.7 billion at the end of 2016, then rose by 22.1 percent (SR 243.6 billion) in 2018 to SR 1.35 trillion.

    While it jumped 43.1 percent to 405.5 billion riyals in two years (2018 compared to 2016).


    "Moody's" said that Saudi Aramco has a very strong liquidity position of $ 48.8 billion in liquidity against $ 27 billion in registered debt.

    "The company's balance sheet debt is managed conservatively," the agency said.

    It added that it has $ 46.8 billion in banking facilities of which $ 25.5 billion is still available.

    Based on its financial resources, its huge hydrocarbon inventory and low production cost, AA + has set a rating for the company.

    "Saudi Aramco has many of the characteristics of AAI (top rated) companies," said Rehan Akbar, vice president of Moody's,

    It has a low level of debt, compared to cash flow, in addition to large-scale production, market leadership and access to one of the world's largest hydrocarbon resource reserves.

    However, the final rating is restricted to the classification of Saudi Arabia in category (A1) because of the close ties between the government and the company.


    Moody's said that Aramco is able to finance the SABIC deal in cash without the need to borrow, considering that the acquisition will lead to "strengthening the commercial sector of the company."

    The agency said that the daily production of Aramco oil last year was 10.3 million barrels per day, less than its maximum production capacity of about 1.7 million barrels.

    Aramco estimates its proven oil reserves at 227 billion barrels and its hydrocarbon reserves at 275 billion barrels of oil equivalent, which are enough for more than half a century, a "high and comfortable level," according to "Fitch."


    While Fitch stated that based on information provided by Aramco, 5 per cent of its initial public offering is still outstanding.

    Saudi Arabia has $ 500 billions of reserves run by the central bank.

    Along with these huge reserves, the deal with SABIC will give the Saudi Public Investment Fund a cash flow to implement Vision 2030.


    On Monday, Saudi Aramco announced the launch of a global medium-term bond program, which will also arrange a series of meetings with fixed-income investors.

    Under this program, it is possible that non-guaranteed, dollar-denominated bonds will be issued "bonds" based on market conditions.

    The bonds, if issued, will be on the official list with the UK listing authority and are acceptable for trading on the London Stock Exchange.

    According to Aramco statement, this announcement does not constitute an offer to sell, or an inducement to purchase any securities, nor will there be any offering, solicitation or sale of any securities in any country, state or territory where such offering, solicitation or illegal sale is made.


    The bonds have not been registered and will not be registered under the US Securities Act of 1933, as amended and will not be offered or sold in the United States or to US persons without registering or applying exemption from registration requirements.

    * Economic Reports Unit​

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