Saudi Aramco, the world's largest oil-producing company, said second-quarter net profit surged more than 90 per cent on higher crude prices, volumes sold and higher refining margins.
Net profit after zakat for the three-month period to the end of June increased to $48.4 billion, from about $25.5bn in the year-earlier period, the national oil company of Saudi Arabia said on Sunday, in a regulatory filing to the Tadawul stock exchange, where its shares are traded.
The quarterly earnings are a record for the company since its initial public offering in 2019. Net income for the second-quarter of this year increased about 23 per cent from the first quarter of 2022.
Aramco plans to pay a second quarter dividend of $18.8bn in the third quarter. It paid the same amount in the second quarter. Net income for the first half of the year increased 86 per cent to $87.9bn from the same period of 2021, due to higher crude oil prices, volumes sold and improved downstream margins.
“Our record second-quarter results reflect increasing demand for our products — particularly as a low-cost producer with one of the lowest upstream carbon intensities in the industry,” said Aramco president and chief executive Amin Nasser.
Aramco's revenue for the second quarter of the year rose about 80 per cent to nearly $150bn from the same quarter a year earlier. Revenue increased about 20 per cent from the first three months of 2022.
Cash flow from operating activities increased to $44bn and free cash flow increased 53 per cent year-on-year to $34.6bn. Free cash flow increased 59 per cent to $65.2bn during the first half of 2022 from the same period in 2021. This increase was mainly driven by higher cash from operating activities.
The company's gearing ratio was reduced to 7.9 per cent at the end of June from 14.2 per cent at the end of last year, indicating cash flow should continue to benefit from higher oil prices this year.
Return on average capital employed during the second quarter was 31.3 per cent, compared to 16.7 per cent for the same periods in 2021. Capital expenditure increased 25 per cent to $9.4bn in the second quarter and by 8 per cent to $16.9bn in the first half of 2022, compared to the same periods in 2021.
Aramco is expanding its chemicals business and developing prospects in low-carbon businesses while also pressing forward with the integration of its upstream and downstream segments.
The company continues to work on increasing its maximum crude oil capacity to 13 million barrels of oil per day by 2027 from 12 million barrels of oil per day.
In April, Fitch Ratings revised Aramco's outlook to positive from stable following a similar rating action on the sovereign ratings of the kingdom. Aramco generated almost $150bn in funds last year from operations, beyond any other oil company globally, the rating agency said.
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