Saudi Aramco’s logo is pictured at the oil facility in Abqaiq, Saudi Arabia, on October 12, 2019.
Maxim Shemetov | Reuters
Oil giant Aramco reported a more than 80% rise in net income on Sunday, beating analysts’ expectations and setting a new quarterly earnings record since its IPO.
The Saudi Arabian giant said net income rose 82% to $39.5 billion in the first three months of the year, up from $21.7 billion in the same period last year. Analysts polled by Reuters had forecast net income of $38.5 billion.
The record quarter for Aramco comes amid a stellar quarter for Big Oil, which benefited from sharp increases in oil and gas prices. Aramco said its gains were driven by higher crude oil prices, increasing volumes sold and improving downstream margins.
“During the first quarter, our strategic downstream expansion continued to progress in both Asia and Europe, and we continue to develop opportunities that complement our growth objectives,” said Amin Nasser, Aramco’s President and CEO, in Sunday’s earnings release.
“Against a backdrop of increasing volatility in global markets, we remain focused on helping meet the world’s need for reliable, affordable and increasingly sustainable energy.”
With a market cap of around $2.43 trillion as of Wednesday, Aramco overtook Apple last week to become the world’s most valuable company. Company market caps looked similar on Sunday.
Aramco stock is up over 15% so far in 2022. In March, the oil giant reported that its full-year profit more than doubled last year on continued rises in oil prices, compounded by Russia’s invasion of Ukraine and looming European Union sanctions on Russian oil and the prospect of a tighter offer.
Aramco’s results reflect continued momentum in the oil and gas industry, which has benefited from price increases of more than 45% year-to-date. Profits at Aramco’s global rivals such as BP and Shell have hit their highest level in years, despite writedowns for exiting operations in Russia after invading Ukraine.
This is how Aramco rewards investors. The company said it will use $4 billion in retained earnings to pay out bonus shares to shareholders — the equivalent of one share for every 10 shares held. It also kept its massive dividend steady at $18.8 billion, backed by a 68% year-over-year increase in free cash flow to $30.6 billion.