A rare glimpse of Saudi oil giant Saudi Aramco reveals net profit of $ 111 billion

Saudi Aramco 's net profits reached $ 111 billion last year, according to an badessment released Monday by Moody' s Investors Services, which offered a rare glimpse of the public oil company 's financials before the year. issue of its first bonds in international markets.

This puts Aramco at the forefront of the most profitable companies in the world. In contrast, Apple reported net income of approximately $ 60 billion in its most recently completed full year, with Royal Dutch Shell reporting net income of $ 23 billion and Exxon Mobil of $ 21 billion.

Moody's said that the oil giant's business figure had reached 355.9 billion US dollars last year and that it was producing 10.3 million barrels of crude oil a day. in 2018.

In recent memory, the figures provide a first glimpse of Aramco's revenue and results. The company, which was originally an American company with an oil rights concession in Saudi Arabia, was fully acquired by the Saudi government in 1980.

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"I would say that it tells us that Aramco is worth at least a trillion dollars," said Ellen Wald, president of Transversal Consulting and author of Saudi Inc, a book on the history of the company Aramco.

In another valuation released Monday, Fitch Ratings said Aramco had made a profit of $ 244 billion before interest, taxes, depreciation and amortization.

Moody's said that Aramco had paid $ 58.2 billion in dividends in 2018 and $ 50.4 billion in 2017. It is still unclear how these dividends are distributed within the Saudi monarchy and his ruling family.

Fitch said that Aramco accounted for about 70% of the Saudi government's budget revenue between 2015 and 2017, but it was not clear if this figure included the dividends mentioned by Moody's.

In anticipation of a partial listing of Aramco in an international market, the Saudi government has reduced in 2017 Aramco's tax rate from 85% to 50%. Saudi Arabia is working to create new sources of revenue and reduce the government's dependence on oil.

At its very first valuation for Aramco, Fitch gave the company a rating of A +, while Moody's rated the company A1.

The ratings are considered investment grade and indicate a low credit risk, but the agencies delayed issuing their best ratings to Aramco due to close ties between the Saudi state and the company. Specifically, Fitch stressed "the state's influence on the company by regulating the level of production, taxation and dividends".

Wald said that five years ago, under the late King Abdullah, the government's ties with Aramco would not have been a major concern because the company was "essentially independent."

This has now changed under King Salman and his son, Crown Prince Mohammed bin Salman, who play a much more active role in controlling various centers of power in the kingdom, including Aramco, Wald said.

"Nothing says … what kinds of demands this future king and his son could impose on society and that could affect its main profitability," she added.

The rating agencies issued their reports the same day that Aramco announced that it would start meeting investors about the sale of its bonds which, if issued, would be denominated in dollars and traded on the Stock Exchange. London. The bonds are expected to help pay for the acquisition by Aramco of the majority stake in Saudi-owned petrochemical company SABIC, with a capital of US $ 69 billion, held by the kingdom's sovereign wealth fund.

According to his conservative forecasts, Fitch said Saudi Aramco 's net debt would reach about 35 billion US dollars by 2021, after the integration of the SABIC transaction.

The US $ 69 billion contract with SABIC injects capital into the public investment fund, which is overseen by the crown prince.

Prince Mohammed transformed the fund to support important development projects throughout the kingdom due to delays in the IPO of Aramco, which he had presented as a way raise funds for FIP projects.

The agreement was reached after the Crown Prince's first efforts to attract Western investors as his plans for social and economic transformation suffered a setback after the badbadination of Washington Post columnist Jamal Khashoggi by Saudi agents at the country's consulate in Istanbul last year.