The Saudi Aramco logo is pictured at the oil facility in Abqaiq, Saudi Arabia on October 12, 2019.
Maxim Shemetov | Reuters
Oil giant Aramco reported a jump of more than 80% in net income on Sunday, beating analysts’ expectations and setting a new quarterly earnings record since its IPO.
The Saudi Arabian giant said net income rose 82% to $39.5 billion in the first three months of the year from $21.7 billion in the same period last year. Analysts polled by Reuters had forecast net income 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 profits were boosted by higher crude oil prices, rising sales volumes and better margins downstream.
“During the first quarter, our strategic downstream expansion progressed further in Asia and Europe, and we continue to develop opportunities that complement our growth objectives,” Aramco President and CEO Amin Nasser said in the earnings release on Sunday. .
“Against a backdrop of heightened volatility in global markets, we remain focused on helping to meet the world’s demand for reliable, affordable and increasingly sustainable energy.”
With a market cap of about $2.43 trillion as of Wednesday, Aramco last week overtook Apple to become the most valuable company in the world. The companies’ market values looked similar on Sunday.
Aramco shares are up more than 15% so far in 2022. In March, the oil giant reported that its annual profit last year has more than doubled due to the continued rise in oil prices, driven by the impending Russian invasion of Ukraine. European Union sanctions on Russian oil and the prospect of 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. Its free cash flow increased 68% year-on-year to $30.6 billion, which the company says will allow it to distribute $18.8 billion in dividends to shareholders.
Aramco also said it would use $4 billion in retained earnings to distribute bonus shares to shareholders – at the value of one share for every 10 shares held.