The Strategist

Saudi Aramco reports 12% decline in half-year profit

08/12/2019 - 14:43

Saudi State Oil Company Saudi Arabian Oil Co. (Saudi Aramco) for the first time presented a semi-annual report, and reported a decrease in net profit in the first half of 2019 by 12%, to $ 46.899 billion, due to lower oil prices.

The company decided to disclose a semi-annual result in anticipation of $ 12 billion-worth IPO. Reuters recalls that the company submitted a report for 2018 earlier this year for the same purpose. The agency also calls Saudi Aramco the most profitable company in the world: Apple, the leader in profitability of public companies, reported a six-month profit of $ 31.5 billion.

In the first half of the year, Saudi Aramco's EBIT decreased to $ 92.5 billion from $ 101.3 billion, and free cash flow grew to $ 37.98 billion from $ 35.59 billion.

The average oil sales price in the reporting period amounted to $ 66 per barrel compared to $ 69 per barrel a year earlier. A drop in quotes and an increase in production costs by about $ 1.4 billion resulted in a decrease in the company's profit.

Meanwhile, Saudi Aramco's capital expenditures in the first half of the year fell to $ 14.47 billion from $ 16.46 billion a year earlier.

In January-June, the total production of the company amounted to 13.2 million barrels of oil equivalent per day, oil production - 10 million barrels per day.

For the first half of the year, Saudi Aramco paid dividends to shareholders totaling $ 46.39 billion against $ 32 billion a year earlier.

Saudi Aramco is one of the largest oil and gas companies in the world; it employs about 76 thousand people. The company plans an initial public offering in 2020 or 2021. This IPO may become the largest in the world since Riyadh intends to attract about $ 100 billion from the placement of 5% of the shares, which provides around $ 2 trillion.