Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Saudi Aramco joins oil results bonanza with 39% jump in net income

Published 11/01/2022, 01:41 AM
Updated 11/01/2022, 05:57 AM
© Reuters. FILE PHOTO: 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

DUBAI (Reuters) -Saudi Arabian state oil producer Aramco (TADAWUL:2222) beat forecasts on Tuesday with a 39% jump in third-quarter net income and reported record free cash flows, joining rivals in benefiting from higher prices and robust demand.

Aramco's net income rose to $42.4 billion for the three months to Sept. 30 from $30.4 billion a year earlier, it said in a regulatory filing. That was just above the median forecast of $41.7 billion from 16 analysts.

"Aramco's strong earnings and record free cash flow in the third quarter reinforce our proven ability to generate significant value through our low cost, lower-carbon intensity upstream production and strategically integrated upstream and downstream businesses," Chief Executive Officer Amin Nasser said.

The company's free cash flow rose to $45 billion from $28.7 billion a year-earlier. It declared a dividend of $18.8 billion in the third quarter, meeting its own target, which will be paid in the fourth quarter.

"Given this lengthy period with elevated crude prices, which feed into solid cash flow performances as well as deleveraging of Aramco’s balance sheet, we are of the view that dividends will ultimately be increased," said Yousef Husseini, associate director for equity research at EFG Hermes.

Aramco joins oil majors Exxon Mobil Corp (NYSE:XOM), Chevron (NYSE:CVX) and BP (NYSE:BP) that have reported strong or record breaking results recently, benefiting from surging crude and natural gas prices that have boosted inflation around the world and led to fresh calls to further tax the sector.

"While global crude prices during this period were affected by continued economic uncertainty, our long-term view is that oil demand will continue to grow for the rest of the decade given the world's need for more affordable and reliable energy," Nasser said.

Aramco's reported net income, while higher year on year, was slightly lower than its record second quarter.

© Reuters. FILE PHOTO: A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov

Net income was also partially offset by increased production royalties, resulting from stronger crude oil prices and higher sales volume.

Royalties and other taxes more than doubled year-on-year in the third quarter to $24.3 billion, from $10.48 billion last year.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.