SAUDI ARAMCO NET INCOME $39.5 BLN
ARAMCO - May 15, 2022 - The Saudi Arabian Oil Company (“Aramco” or “the Company”) today announced its first quarter 2022 financial results, posting an 82% year-on-year (YoY) increase in net income to $39.5 billion — and setting a new quarterly earnings record for the Company since its Initial Public Offering in 2019. Aramco also declared a Q1 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.
Commenting on the results, Aramco President & CEO Amin H. Nasser, said: “Against the backdrop of increased volatility in global markets, we remain 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.
“During the first quarter, our 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 lowcarbon 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.”
Aramco achieved a record quarterly net income of $39.5 billion in Q1, an 82% increase from $21.7 billion in Q1 2021, primarily driven by higher crude oil prices and volumes sold, and improved downstream margins.
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% YoY to $30.6 billion and the Company continues to strengthen its balance sheet, with the gearing ratio* reducing to 8.0% 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.
In line with the Company’s prudent financial framework and focus on capital flexibility, Aramco decreased its total borrowings principally through a prepayment to the Public Investment Fund in January, therefore reducing the total outstanding principal amount of Promissory Notes by $8 billion originally issued in connection with the acquisition of a 70% stake in SABIC. This resulted in a reduction in financing costs.
Aramco continued to deliver a stable dividend in Q1, with $18.8 billion to be paid to shareholders in the second quarter. In addition, Aramco’s Extraordinary General Assembly on May 12 approved the Board of Directors’ recommendation in Q1 to capitalize $4 billion of retained earnings to support the distribution of bonus shares to shareholders, in the amount of one share for every 10 shares held.
First quarter capital expenditure was $7.6 billion and Aramco continues to expect capital expenditure to grow until around the middle of the decade, to support the Company’s long-term strategy realization.
The Company continued to progress its portfolio optimization program and closed a lease and leaseback deal involving its gas pipeline network with a consortium of investors led by BlackRock Real Assets and Hassana Investment Company. The consortium acquired a 49% stake in a newlyformed Aramco subsidiary, Aramco Gas Pipelines Company, with Aramco receiving upfront proceeds of $15.5 billion.
Aramco first quarter 2022 results
Strongest quarterly earnings since IPO as Q1 net income rises more than 80% YoY to $39.5 billion
• Net income: $39.5 billion (Q1 2021: $21.7 billion)
• Cash flow from operating activities: $38.2 billion (Q1 2021: $26.5 billion)
• Free cash flow*: $30.6 billion (Q1 2021: $18.3 billion)
• Gearing ratio*: 8.0% on March 31, 2022 (end of 2021: 14.2%)
• Q4 2021 dividend of $18.8 billion paid in the first quarter; Q1 2022 dividend of $18.8 billion to be paid in the second quarter
• Extraordinary General Assembly approves bonus shares grant
• Company grows presence in Asia and Europe as downstream expansion gathers pace
• Emphasis on tackling emissions highlighted by planned participation in Voluntary Carbon Market