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Saudi Aramco announces $68 bln profit for 9 months ahead of IPO

Nov 04, 2019
2 min read
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Saudi Aramco, the Saudi Kingdom’s energy giant, reported a net profit of US$68 billion for first three quarters of the year, ahead of the launch of its milestone public listing.

The company, which produced one in every eight barrels of crude oil during 2016 and 2018, made $224 billion in revenue and other income related to sales during the nine-month period, while its capital expenditure was $23 billion, Aramco said in a statement about its intention to float. Earlier this year, it announced a net profit of $111.1 billion for the full year 2018 – it did not share a quarterly breakdown.

On Sunday, Saudi Arabia’s market regulator approved the energy giant’s plans to list 1-2 per cent of the company on the domestic stock exchange. At a best-case valuation of $2 trillion, Aramco could raise between $20-40 billion from the listing, potentially the largest ever IPO.

Aramco also announced a third quarter dividend of $13.4 billion – it will also declare an interim dividend of a maximum of $9.5 billion after receiving necessary approvals before the date of allocating shares to subscribers to its initial public offering.

 Additionally, it will also plans to hand out an interim dividend of $3.9 billion for the period from the date of shares allocation until the end of December, to be paid from the company’s cash on hand.

Aramco’s free cash flow for the nine months ending Sept. 30 is $59 billion.

Recent attacks on its facilities Abqaiq and Khurais, temporarily reduced the company’s crude production by approximately 54 per cent. To minimise impact on customers, Aramco said it tapped into inventories outside Saudi Arabia swapping grades of deliveries and curtailing NGL deliveries to some customers and increasing production from other fields.

Additionally, with gas production capacity reduced, some power plants in the country switched to feedstocks to crude burning. On Sept. 25, the company’s production recovered to the same levels prior to the Sept. 14 attacks.

Aramco said it doesn’t expect the attacks to have material impact on the company’s financials or results of operations.

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