Saudi Aramco’s first-half net income falls 12% to $47bn

Revenues also drop to $164bn on lower oil prices and reduced production

Revenues and profits fell at the world’s biggest oil producer, Saudi Aramco. Photograph: Ahmed Jadallah/Reiters

Revenues and profits fell at the world’s biggest oil producer, Saudi Aramco. Photograph: Ahmed Jadallah/Reiters

 

Saudi Aramco, the world’s top oil producer, reported first-half net income of $46.9 billion on Monday, down from $53.02 billion a year earlier.

By comparison, Apple, the world’s most profitable listed company, made $31.5 billion in the first six months of its financial year.

Aramco said total revenues including other income related to sales were at $163.88 billion in the first half of this year, down from $167.68 billion a year earlier, on lower oil prices and reduced production.

The State-run company is also taking a 20 per cent stake in the oil to chemicals business of India’s Reliance Industries, Reliance chairman Mukesh Ambani said on Monday, in one of the biggest ever foreign investments in India.

Aramco disclosed its closely guarded financials for the first time ever earlier this year, revealing its 2018 earnings in order to obtain a public rating and start issuing international bonds. The figures showed that Aramco was the most profitable company in the world, surpassing US behemoths such as Apple and Exxon Mobil. The Saudi national oil company plans to launch an initial public stock offering or IPO by 2020-2021, having postponed its flotation from 2018. Compared to Aramco’s first half earnings, US oil giant Exxon Mobil Corp. made around $5.5 billion in the first half of the year, while Royal Dutch Shell reported $8.8 billion.

“Despite lower oil prices during the first half of 2019, we continued to deliver solid earnings and strong free cash flow underpinned by our consistent operational performance, cost management an fiscal discipline,” Aramco’s president and chief executive officer Amin Nasser said in a statement.

Aramco said the drop in earnings was mainly due to a drop of 4% in the average realised price of crude oil from $69 to $66 per barrel and an increase in purchases, producing and manufacturing costs, and depreciation and amortization costs. The drop was partially offset by a decrease of $2.62 billion in income taxes, the oil company said.

Aramco said it had a crude output of 10 million barrels a day in the first six months of the year, little changed from the same period in 2018. Saudi Arabia has been restricting its output under an OPEC-led pact to reduce global oil supply to support prices. – Reuters