Saudi Aramco sets share sale stage with $47 billion profit

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Shaybah, the base for Saudi Aramco's Natural Gas Liquids plant and oil production in the surrounding Shaybah field in Saudi Arabia's remote Empty Quarter. (AFP file photo)
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In this file photo taken on January 16, 2018, the Saudi Aramco exhibit is shown at the 2018 North American International Auto Show in Detroit, Michigan. (AFP / GETTY IMAGES NORTH AMERICA)
Updated 13 August 2019

Saudi Aramco sets share sale stage with $47 billion profit

  • Saudi oil giant holds first-ever earnings call with investment analysts

DUBAI: Saudi Aramco proved itself the most profitable company in history on Monday with financial figures that beat all its competitors by a long way.

The Kingdom’s oil giant reported net income of $46.9 billion for the first half of 2019, way ahead of the $31.5 billion reported by the next biggest earner, Apple. Aramco’s profits are nearly 50 percent higher than those of the five largest Western oil companies combined.

It was the first time Aramco — a private company owned by the Kingdom — had disclosed its financial strength in a formal results announcement, and followed the unprecedented level of financial information disclosed in April, when it broke world records in the bond markets with a much-in-demand $12 billion issue.

The company also underlined that it was ready to go to international stock markets in an initial public offering (IPO) of shares whenever the Kingdom thought conditions were right. Some experts think the IPO could happen next year — earlier than many analysts had predicted.




Saudi Aramco's president and CEO, Amin al-Nasser. (AFP file photo)

Amin Nasser, the president and chief executive of Aramco, said the company’s profits — lower than in the same period last year — were earned against a background of tough conditions in the global energy market.

“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 and fiscal discipline,” he said in a formal statement to the London Stock Exchange, where Aramco’s bonds are listed.“Our financials are strong and we continue to invest for future growth.”

 

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The profit announcement came at the start of a busy day for Aramco. It also announced a planned investment in the petrochemicals and refining business of the Indian comglomerate Reliance Industries. There was speculation about Aramco buying a 20 per cent stake in the business for about $15 billion, but Khalid Al-Dabbagh, Aramco’s chief financial officer, declined to confirm those figures and said the talks with Reliance were at “an early stage.”

Al-Dabbagh was speaking on a conference call with investment analysts — another first for Aramco — in which he also revealed that the upgrade to the Kingdom’s east-west pipeline, aiming to increase capacity on the route from 5 million to 7 million barrels per day amid security concerns in the Arabian Gulf, would be finished next month.

Dividend payments to the Kingdom amounted to $46.4 billion in the first half of 2019, including a “special dividend” of $20 billion “refecting the exceptionally strong financial performance the company delivered in 2018.”


ALSO READ:  Saudi Aramco ‘ready’ for IPO, says oil giant’s finance boss


 


US President Trump does not want to do business with China’s Huawei

Updated 19 August 2019

US President Trump does not want to do business with China’s Huawei

  • US Commerce Department expected to extend a reprieve that permits Huawei to buy supplies from US companies to service its customers

WASHINGTON: US President Donald Trump on Sunday said he did not want the United States to do business with China’s Huawei even as the administration weighs whether to extend a grace period for the company.
Reuters and other media outlets reported on Friday that the US Commerce Department is expected to extend a reprieve given to Huawei Technologies Co. Ltd. that permits the Chinese firm to buy supplies from US companies so that it can service existing customers.
The “temporary general license” will be extended for Huawei for 90 days, Reuters reported, citing two sources familiar with the situation.
On Sunday, Trump told reporters before boarding Air Force One in New Jersey that he did not want to do business with Huawei for national security reasons.
He said there were small parts of Huawei’s business that could be exempted from a broader ban, but that it would be “very complicated.” He did not say whether his administration would extend the “temporary general license.”
Speaking earlier on Sunday, National Economic Council director Larry Kudlow said the Commerce department would extend the Huawei licensing process for three months as a gesture of “good faith” amid broader trade negotiations with China.
“We’re giving a break to our own companies for three months,” Kudlow said on NBC’s “Meet the Press.”