Saudi Aramco has posted its highest profit since 2019, with net income rising to $39.5 billion, reflecting a more than 80 per cent increase in the first quarter of 2022.

The bumper first-quarter earnings rides on the back of the volatility in global energy markets and soaring oil prices following Russia’s invasion of Ukraine, the company said in a press release.

The company also declared a Q1 2022 dividend of $18.8 billion to be paid in the second quarter, and has approved the distribution of one bonus share for every 10 shares held in the Company. “The results were underpinned by higher crude oil prices and volumes sold, and improved downstream margins,” according to the company’s press release today, May 15, 2022.

The company’s cash flow from operating activities was $38.2 billion in the first quarter, compared to $26.5 billion in Q1 2021. Free cash flow increased by 68% on a year-on-year basis to $30.6 billion.

The company said it continues to strengthen its balance sheet, with the gearing ratio reducing to 8.0 per cent at March 31, 2022 from 14.2% at December 31, 2021. The decrease in gearing was a result of higher cash and cash equivalents, primarily attributable to stronger operating cash flows and cash proceeds in connection with Aramco’s gas pipeline transaction.

Aramco demonstrated reliable upstream performance with an average total hydrocarbon production of 13.0 million barrels of oil equivalent per day in the first quarter of 2022. The Company maintained its exceptional track record as a global energy supplier, achieving 99.9% reliability in its deliveries to customers during the first quarter.

Other energy firms including Shell, BP and TotalEnergies have also reported soaring profits as a result, although many are incurring costs exiting operations in Russia.

Company’s Focus in the Quarter

Saudi Aramco’s President & CEO Amin H. Nasser, said despite the volatility in global markets, the company was focused on “helping meet the world’s demand for energy that is reliable, affordable and increasingly sustainable”.

“Energy security is vital and we are investing for the long term, expanding our oil and gas production capacity to meet anticipated demand growth and creating long-term shareholder value by capitalizing on our low lifting cost, low upstream carbon intensity, and integrated downstream business.”
Amin Nasser

Nasser said during the first quarter, the company’s strategic downstream expansion progressed further in both Asia and Europe, and “we continue to develop opportunities that complement our growth objectives”.

“As we collaborate with domestic and international partners to explore new and emerging technologies and solutions, from developing cleaner transport technologies to establishing low carbon hydrogen and ammonia value chains, I am more optimistic than ever about the positive contribution we can make, both to our customers and to the ongoing global energy transition.”
Amin Nasser

Last week, Aramco overtook Apple as the world’s most valuable company as higher oil prices pushed its shares to record levels, with the company’s market capitalization at $2.43 trillion.

Meanwhile, the story is not all flowery, the company, the kingdom’s “crown jewel” and a key source of government revenue, faces security challenges related to an ongoing war by a Saudi-led military coalition against Yemen’s Houthi rebels, who have repeatedly targeted Saudi Arabia, including Aramco sites.