Saudi Oil Giant Profit Enormous Despite Pandemic
With rise in first-quarter net profit and maintained its dividend payout Saudi Aramco beat analysts' expectations.
Saudi-Arabia-state run oil producer Saudi Aramco beat analysts’ forecasts on Tuesday with a 30 per cent rise in first-quarter net profit and maintained its dividend payout, helped by strong oil prices.
Given the positive signs for energy demand in 2021, there are more reasons to be optimistic that better days are coming, Mr. Amin Nasser, chief executive of the world’s top oil exporter, said in a statement.
And while some headwinds still remain, we are well-positioned to meet the world’s growing energy needs as economies start to recover, he added.
Net income rose to $21.7 billion for the quarter to March 31 from $16.7 billion a year earlier. Aramco had been forecast to deliver net profit of $19.48 billion, according to an average based on estimates by five analysts.
Aramco, which listed in 2019 with the sale of a 1.7 per cent stake mainly to the Saudi public and regional institutions, said earnings were boosted by stronger crude prices and higher refining and chemicals margins, helping offset lower production.
The OPEC+ group, the alliance that groups the Organization of the Petroleum Exporting Countries, Russia and several other producers, have cut output to support prices but agreed on a plan in April to start gradually easing those curbs from May 1.
Aramco, which reduced its output as part of that pact and as a result of Saudi Arabia’s additional voluntary production cuts, said global demand for petroleum products was recovering from its lows in 2020 but remained below pre-pandemic levels.
Earnings by global energy companies such as Exxon Mobil have climbed on the back of rising crude prices, which are up by about a third this year, as fuel demand recovers from the pandemic and as a global surplus of crude shrinks.