Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Saudi Aramco Q2 profit soars on higher prices, demand recovery

CommoditiesAug 08, 2021 04:05AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov

By Hadeel Al Sayegh, Marwa Rashad and Saeed Azhar

DUBAI (Reuters) -Saudi Arabian state oil producer Aramco (SE:2222) reported a near four-fold rise in second-quarter net profit on Sunday, beating expectations and boosted by higher oil prices and a recovery in oil demand.

Aramco said its results were supported by the global easing of COVID-19 restrictions, vaccination campaigns, stimulus measures and accelerating economic activity in key markets.

Aramco joins other oil majors who have reported strong results in recent weeks.

Exxon Mobil (NYSE:XOM) last month said its net income for the second quarter came in at $4.69 billion, or $1.10 per share, compared with a loss of $1.08 billion, or 26 cents per share, a year ago. Royal Dutch Shell (LON:RDSa) reported its highest quarterly profit in more than two years, with adjusted earnings at $5.53 billion, compared with earnings of $638 million a year earlier.

Oil prices, boosted by output cuts made by the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, closed at $70.70 a barrel on Friday and has gained over 35% since the start of the year. [O/R]

"Our second quarter results reflect a strong rebound in worldwide energy demand and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery

gains momentum," Aramco CEO Amin Nasser said in a statement.

Aramco's net profit rose to 95.47 billion riyals ($25.46 billion) for the quarter to June 30 from 24.62 billion riyals a year earlier.

Analysts had expected a net profit of $23.2 billion, according to the mean estimate from five analysts.

Aramco's CEO told an earnings call that global oil demand was expected to hit 99 million barrels a day by the end of the year and 100 million barrels next year,

Aramco is still working to increase its own capacity to 13 million barrels day, Nasser said, reiterating a plan announced last year.

MAINTAINS DIVIDEND

It declared a dividend of $18.8 billion in the second quarter, in line with its own target, which will be paid in the third quarter.

Credit Suisse (SIX:CSGN) analysts said late last month they expected Aramco to declare a special dividend because of higher oil prices that had helped boost its free cash flow.

Yousef Husseini, equity research analyst at EFG Hermes, said Aramco may be keeping the extra cash for taking part in the new state-backed Shareek (Partner) initiative, to partner with private sector investments.

"I think the reason they maintained [the dividend] and our rationale was that they are retaining money to invest in future projects and particularly the "Shareek" programme," he said.

Aramco's capital expenditure was $7.5 billion in the second quarter, an increase of 20% from a year earlier.

A consortium including Washington DC-based EIG Global Energy Partners in June closed a deal to buy 49% of Aramco's pipelines business for $12.4 billion.

($1 = 3.7501 riyals)

Saudi Aramco Q2 profit soars on higher prices, demand recovery
 

Related Articles

Wall Street rebounds after virus-related sell-off
Wall Street rebounds after virus-related sell-off By Reuters - Nov 29, 2021 19

By Sinéad Carew and Kevin Buckland (Reuters) - Wall Street stocks closed higher on Monday, regaining some of the ground lost in Friday's sell-off, as investors appeared hopeful...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email