Oil large Saudi Aramco beats estimates with 30% hike in first-quarter revenue

Oil tanks at an oil processing plant operated by Saudi Aramco, a Saudi Arabian state oil and gas company, in the Abqaiq oil field.

Stanislav Krasilnikov | TASS via Getty Images

Oil giant Saudi Aramco reported a 30% increase in net profits on Tuesday. This is a sign of a sustained recovery after last year’s oil market crash that cut annual profits for the state-owned company in half.

In a press release released Tuesday, the company said net income rose to $ 21.7 billion for the first three months of the year, from $ 16.6 billion for the same period last year.

Despite lower oil production in February and March, it beat some analysts’ estimates of $ 17.24 billion. The number is approaching the company’s net income for the first quarter of 2019, which was $ 22.2 billion.

Saudi Arabia’s gigantic oil producer also kept its dividend. $ 18.8 billion should be paid out in both the first and second quarters.

Earnings reflect a dramatically improved climate for oil markets since the first quarter of last year, when Aramco reported a 25% decline in net profits for the period struggling with the initial knockdown of the coronavirus pandemic and crater-like global demand .

The company said free cash flow was $ 18.3 billion for the first quarter, down from $ 15 billion for the same period last year.

Like its global counterparts, Aramco has weathered an uncertain oil price environment and an unpredictable recovery in the global economy. The company called 2020 “the most challenging year” in its history and is now benefiting from the recovery in the oil markets. The international reference prices for Brent crude oil are roughly twice as high as last year. Refining and chemical margins are also starting to improve.

“The momentum of the global economic recovery has strengthened the energy markets,” said Amin Nasser, President and CEO of Aramco, in a company press release on Tuesday. He added that “there are still some headwinds” but said, “Given the positive signs of energy demand in 2021, there are more reasons to be optimistic that better days are coming.”

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