Saudi oil giant books US$46.9b profit, becoming world’s most profitable company

Business | 12 Aug 2019 3:33 pm

Leading oil producer Saudi Aramco maintained its position as the world’s most profitable company even as it reported a 12 percent drop in first-half net income to US$46.9 billion due to lower oil prices, Reuters reports.

By comparison, Apple Inc, the world’s most profitable listed company, made US$31.5 billion in the first six months of its financial year.

Aramco said it generated total revenues, including other income related to sales, of US$163.88 billion in the first half of this year, down from US$167.68 billion a year earlier.

Aramco, the world’s biggest oil producer, is also taking a 20 percent stake in the oil to chemicals business of India’s Reliance Industries, Reliance Chairman Mukesh Ambani said today, in one of the biggest ever foreign investments in India.

State-run Aramco disclosed its closely guarded financials for the first time ever earlier this year, revealing its 2018 earnings in order to obtain a public rating and start issuing international bonds.

The figures showed that Aramco was the most profitable company in the world, surpassing U.S. behemoths such as Apple and Exxon Mobil. The Saudi national oil company plans to launch an initial public stock offering or IPO by 2020-2021, having postponed its flotation from 2018.

Compared to Aramco’s first half earnings, U.S. oil giant Exxon Mobil Corp. made around US$5.5 billion in the first half of the year, while Royal Dutch Shell reported US$8.8 billion.

“Despite lower oil prices during the first half of 2019, we continued to deliver solid earnings and strong free cash flow underpinned by our consistent operational performance, cost management an fiscal discipline,” Aramco’s President and Chief Executive  Amin Nasser said in a statement.

Aramco said the drop in earnings was mainly due to a drop of 4 percent in the average realized price of crude oil from US$69 to US$66 per barrel and an increase in purchases, producing and manufacturing costs, and depreciation and amortization costs.

The drop was partially offset by a decrease of US$2.62 billion in income taxes, the oil company said.

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