Saudi Aramco’s Profit Soars 30 Per Cent as Oil Market Recovers, Dividend Maintained

Summary

• Net income of Saudi Aramco jumped to US$ 21.7 billion for Q1 2021 (Q1 2020: US$ 16.7 billion).
• The firm’s earnings before interest, income taxes and zakat for Q1 2021 was US$ 40,982, whereas Cash flow from operating activities was valued at US$ 26.5 billion for Q1 2021.
• The company declared a dividend of US$ 18.8 billion for Q1, which would be paid in Q2 2021.

Oil and gas major Saudi Aramco, which is officially called the Saudi Arabian Oil Company, announced its first quarter’s results for the three-month period ending 31 March. The company posted a 30 per cent year-on-year (y-o-y) rise in its net income to US$ 21.7 billion for the quarter and also declared a dividend of US$ 18.8 billion, which will be disbursed in the second quarter of 2021.

The healthy results were driven by higher oil prices leading to a rise in refining and chemical margins coupled with an improved economic environment during the first three months of this year. At the same time, the company’s income was partly offset by relatively lower production as compared to Q1 2020. The firm said that while the global demand for petroleum products was rising from its lows seen last year, but on an overall level, it continued to remain below the pre-pandemic levels.

Amin H. Nasser, President and CEO of Saudi Aramco, said that the momentum generated by the world economic recovery strengthened the energy markets during the quarter. The firm was a supplier of choice for its clients and delivered an exceptional quarterly dividend to its shareholders, he added.

Also Read: Saudi Aramco Raises $12.4 Bn By One of The World’s Largest Energy Infra Deals

Financial and operational highlights

• Net income jumped to US$ 21.7 billion for Q1 2021. It was US$ 16.7 billion in Q1 2020.
• The firm’s earnings before interest, income taxes and zakat (EBIT) for Q1 2021 totaled up to US$ 40,982.
• Cash flow from operating activities was valued at US$ 26.5 billion for Q1 2021.
• Free cash flow for the quarter was US$ 18.3 billion.
• The quarter’s capital expenditure stood at US$ 8.2 billion.
• The oil company’s gearing ratio was 23 per cent on 31 March, remaining the same as that on 31 December 2020.
• The company declared a dividend of US$ 18.8 billion for Q1 and it is in line with the firm’s guidance of a US$ 75 billion dividend for the entire year 2021.
• The company’s average realised crude oil price was valued at US$ 60.2 per barrel for the quarter (Q1 2020: US$ 51.8 per barrel).
• The firm’s total hydrocarbon production stood at 11.5 million barrels per day of oil equivalent for the quarter.

Also Read: Aramco To Retain $75 Billion Dividend

• During the reported period, Aramco and The Dow Chemical Company entered into agreements relating to the Sadara joint venture to extend the debt repayment tenure, sponsor guarantees, and provide a grace period for interest payments.
• It partnered with STC to launch ‘Dammam 7’ supercomputers that will enhance the oil firm’s ability to predict the location of new reserves using the latest technologies.