Saudi Aramco earnings jump to US$21.7b, continues to shuffle portfolio
Tuesday, May 04, 2021
Oil giant Saudi Aramco reported a 30 percent jump in net income Tuesday, in a sign of a continued recovery from the previous year’s oil market crash that saw full-year earnings for the state firm slashed in half, CNBC reports.
It beat some analysts’ estimates of US$17.24 billion, despite lower oil production in February and March. The figure nears the firm’s net income level in the first quarter of 2019, which was US$22.2 billion.
The company said free cash flow in the first quarter of 2021 was US$18.3 billion, up from US$15 billion over the same period last year.
Saudi Arabia’s behemoth oil producer also maintained its dividend, with US$18.8 billion due to be paid out in both the first and second quarter.
The earnings reflect an improved climate for oil markets since the first quarter of last year, when Aramco reported a 25 percent fall in net income as it grappled with the initial fallout of the coronavirus pandemic and cratering global demand.
Aramco, like its global peers, has been navigating an uncertain oil price environment and unpredictable global economic recovery. The company described 2020 as “the most challenging year” in its history, and is now benefitting from the recovery in oil markets, with international benchmark Brent crude prices roughly double what they were this time last year. Refining and chemicals margins are also beginning to improve.
“The momentum provided by the global economic recovery has strengthened energy markets,” Aramco President and CEO Amin Nasser said Tuesday in a company press release. He added that “some headwinds still remain,” but said: “Given the positive signs for energy demand in 2021, there are more reasons to be optimistic that better days are coming.“
Further details of how the program will work have not yet been announced.
Saudi Aramco was the world’s biggest IPO when it went public in December 2019, and listed around 1.5 percent of its shares on the local stock exchange, the Tadawul.