Saudi oil giant Aramco's first-quarter profits surge 80%
Oil giant Saudi Aramco said Sunday its profits soared more than 80 per cent in the first three months of the year, as the state-backed company cashes in on the volatility in global energy markets and surging oil prices following Russia's invasion of Ukraine.
The bumper first-quarter earnings by the firm formally known as the Saudi Arabian Oil Co., which overtook Apple as the world's most valuable company last week, show a record net income of US$39.5 billion, up from $21.7 billion during the same period last year.
The figure marks the oil group's highest quarterly profit since 2019, when the Saudi government, which owns 98 per cent of the company, listed a sliver of its worth on Riyadh's Tadawul stock exchange in what was then the world's largest-ever initial public offering.
In a statement, Aramco's chief executive attributed the spike in profits to rising prices as well as the kingdom's increase in production, along with allies in the group known as OPEC Plus. He also appeared to suggest that the disruption from the war in Ukraine had underscored the vital role of oil and gas companies like Aramco.
"Against the backdrop of increased volatility in global markets, we remain focused on helping meet the world's demand for energy that is reliable, affordable and increasingly sustainable," President and CEO Amin H. Nasser said, adding that Aramco was in the midst of increasing its maximum production capacity to meet anticipated demand growth.
Oil prices rallied to a 14-year high of $139 a barrel in March immediately after Russia's invasion of Ukraine, although later receded as Russian oil continued to flow and renewed lockdowns hurt demand for hydrocarbons in China, a top importer. International benchmark Brent crude traded over $111 a barrel Sunday.
Shares of Aramco jumped 1.85 per cent on Sunday on the earnings report, with a share costing 41.40 Saudi riyals, or $11.04 on the Tadawul stock market. Aramco shares have shot up since the start of the year, making it the world's most valuable company last week with a market cap of around $2.43 trillion.
The oil group said it maintained its $18.8 billion cash dividend for the fourth quarter of last year -- completing one of the biggest full-year cash dividends in the world. The payment is a crucial source of revenue for the Saudi government.
Gearing, which the company defines as the degree to which its operations are financed by debt, dropped from 14 per cent at the end of last year to eight per cent in the first quarter.
The strong quarterly results come after resurgent economic activity and the relaxation of global coronavirus restrictions had already delivered record annual results for the state-backed company last year after the devastation of the pandemic and years of sluggish growth amid relatively lower prices.
The skyrocketing oil prices have provided a welcome boost to the Saudi economy.
Saudi Arabia -- the world's top oil exporter and OPEC's de facto leader -- logged its fastest economic growth in a decade during the first quarter of the year, with its gross domestic product growing 9.6 per cent compared to the same period last year, according to its statistics agency. The International Monetary Fund expects the kingdom's economy to expand 7.6 per cent this year.
MORE Business News
A new report from TD says Canadian home sales could fall by nearly one-quarter on average this year and remain low into 2023.
The Canada Day long weekend saw gas prices plummet in parts of the country, but the relief at the pumps may not stay for very long, analysts say. The decreases come after crude oil prices slid in June following the U.S. Federal Reserve's interest rate hikes, sparking fears of a recession.
As stocks continue to slump, it can be easy to let your emotions take over if you've got money invested in the market. But experts agree that there's no need to panic if you're invested in the right type of portfolio with the right level of risk.
With increasing rent prices likely to be the reality for many Canadian tenants, some may be wondering how to navigate rising costs, or whether any course of action can be taken, if any. Legal experts across the country share their advice on how to handle a rent hike.
New federal regulations to force down the greenhouse gas emissions from gasoline and diesel will cost Canadians up to 13 cents more per litre at the pump by 2030.
With inflation reaching a 40-year high, many Canadians have been left in a state of worry. Not only about the rising prices of consumer goods, but whether or not they should continue to save money. It’s not such a simple question, and it depends greatly on your circumstances, contributor Christopher Liew explains in an exclusive column for CTVNews.ca.
As inflation rates soar to the highest they've been in Canada in nearly forty years, nearly half of Canadians say that right now, they're doing worse financially than they were at this time last year.
As Canada’s inflation soars, two ‘extreme couponers’ offer their advice on how to save at the grocery store.