Saudi Aramco, the world’s largest oil exporter, has announced its first-quarter 2023 net profit of US$31.88 billion, beating analysts’ expectations. Although the figures represent a 19% drop from the corresponding period in 2022, the company has exceeded market expectations amid concerns of inflation, rising interest rates, and recession fears.
Saudi Aramco attributed the dip to lower crude oil prices, which were partially offset by lower taxes and a rise in finance and other income.
Commenting on the results, Aramco President and Chief Executive Officer Amin H. Nasser said that the results reflect the company’s “high reliability, cost focus, and ability to react to market conditions as it generates strong cash flows and further strengthens its balance sheet.”
In addition, Aramco has stated its intention to introduce a mechanism for performance-linked dividends in addition to the base dividend. Its base dividend in the fourth quarter of 2022 was US$19.5 billion.
The oil market has been characterised by extreme price swings, with oil prices rallying after the OPEC surprise production cuts on April 2 until the middle of the month when prices fell back to US$70 per barrel. Bloomberg blames the current realities on the surprise production cuts by OPEC and its allies, which have sent prices surging, leaving many investors wrong-footed.
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Despite the dip in profits, Aramco’s current market value is US$2.11 trillion, which is 7.92 trillion Saudi riyals, making it the second-largest company in the world after displacing Microsoft.
Aramco Trading Limited (ATL), a Saudi Aramco subsidiary, was awarded a one-year contract in 2021 for marketing Guyana’s crude.
