Aramco Breaks Record revenue driven by high crude prices

By: MRT Finance

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Saudi state oil company Aramco, the world’s largest, has posted a record after announcing net revenue of $48.4 billion in the second quarter of 2022 on Sunday, driven by rising energy prices from the war in Ukraine and strong energy demand following the COVID pandemic.

According to a statement from the company, this is a 22.7% increase in revenue compared to the first quarter of the year (39,500 million dollars), and a trend that the company expects to continue to rise by anticipating a “continuous demand for oil during the rest of the decade, despite negative economic pressures regarding short-term forecasts.”

Thus, Saudi Aramco (TADAWUL:2222) has nearly doubled its profit by posting net income of $87.9 billion in the first half of 2022 versus $47.2 billion in the same period last year, the note said.

Those figures represent a 90% increase over the first six months of the previous year and are “a new record of quarterly earnings since it went public in 2019.”

“These results are due in the first place to the increase in the prices of the crude oil and the volumes sold, and the increase in profit margins in refining,” he added.

The statement stressed that Saudi Aramco “continues to work to increase its maximum sustainable crude production capacity from 12 to 13 million barrels per day by 2027,” and that the company “maintained its strong track record in supply reliability, with deliveries of crude oil and other products reaching 99.8% in the second quarter of 2022.”

Aramco is the most important and strategic oil company in the world, with 10% of crude oil production globally, the largest supplier to Asia and Europe, and is the company that invests the most in production and refining facilities.

His investments include giant projects for the technological modernization of the production process and the energy transition, although he believes that the world will continue to depend on rifle fuels for decades to come.

The company’s chief executive, Amin Nasser, said in the statement he hoped that “oil demand will continue to grow for the rest of the decade, despite negative economic pressures on the near-term global outlook.”

“Our record second quarter results reflect increased demand for our products, especially as we are a low-cost supplier and one of the least carbon-intensive in the exploration and production of the energy sector,” Nasser said.

“Despite continued global market volatility, there is a need to increase investments in the energy sector to help ensure that markets remain well supplied and facilitate an orderly energy transition,” he added.

The Saudi company, one of the most valuable in the world for its listing on the stock exchange, said in the document that it will distribute dividends estimated at 18,800 million dollars during the third quarter.

It also announced that its free cash flow in the second quarter increased by 53% year-on-year, to $34.6 billion, increasing to $65.2 billion for the first six months of the year, compared to $22.6 billion and $40.9 billion, respectively, for the same two periods of 2021.

“This increase is primarily due to increased cash flow from operating activities,” the note added.

The record increase in oil prices as a result of Russia’s war in Ukraine and the strong post-pandemic demand is expected to give even more advantages to Saudi Aramco that takes advantage of the situation to position itself better in the market and continue to rise.

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