Page 4 - MEOG Week 11 2023

MEOG COMMENTARY MEOG

Aramco posts best ever results

Saudi Aramco rode a wave of improved demand and bolstered
oil prices to achieve a nearly 50% increase in full-year profits

SAUDI ARABIA THIS week, Saudi Aramco announced its full- our products,” the CEO concluded.
year 2022 financial results, revealing a record net
income of $161.1bn – its highest annual profits as Record impact
WHAT: a listed company. Aramco also declared a Q4 div- Net income rose by 46.5% to a new high of
Net profits increased by idend of $19.5bn, which will be paid in Q1 2023. $161bn in 2022, from $110bn in 2021, on the
more than 45%, driven The results were supported by stronger crude oil back of stronger crude oil prices, higher volumes
by a $30 per barrel hike prices, higher volumes sold and improved mar- sold and better margins for refined products. The
in oil prices. gins for refined products. The Company is also average crude oil price realised by the company
working on enhancing its oil and gas production increased by nearly $30 per barrel, from $70.5 in
WHY: capacity, as well as its downstream portfolio, to 2021 to $100.2.
Production of oil and gas meet the expected future demand. The company said that free cash flow had
both increased, by 11% In his comments on the results, Aramco reached an all-time high of $148.5bn in 2022, up
and 4.7%, respectively. President & CEO, Amin Nasser, said: “Aramco from $107.5bn in 2021.
delivered record financial performance in 2022 In a minor, yet meaningful, change, Ara-
WHAT NEXT: as oil prices increased due to global demand. mco said it would pay a $19.5bn dividend for
More increases should be We continued to focus on our long-term strat- Q4 during Q1 2023, marking a 4% increase on
anticipated with Aramco egy, building both capacity and capability across the $18.75bn per quarter, $75bn per year pay-
highlighting its expansion the value chain to address energy security and out promised in its 2019 initial public offering
plans in its results sustainability.” (IPO). The annual dividend has apparently now
reporting. He added: “We believe that oil and gas will increased to $78bn, however, with the state still
remain crucial for the foreseeable future. There owning 94.3% of the company directly, and
are real risks of underinvestment in our industry, another 4% through the Public Investment Fund
which could lead to higher energy prices. There- (PIF), just $332mn per quarter goes to non-state
fore, to take advantage of our unique advantages entities and investors.
at scale and contribute to the global solution, For the second year running, capital expend-
Aramco has embarked on the largest capital iture (CAPEX) increased by 18%, to $37.6bn,
spending program in its history. Last year, our short of the $40-50bn guidance provided by act-
capex rose by 18.0% to reach $37.bn.” ing chief financial officer Ziad Al Murshed this
“Our focus is not just on expanding oil, gas time last year.
and chemicals production, but also investing in The company said that it predicted that
new lower-carbon technologies that have the its capital programme for 2023 would rise to
potential to achieve additional emission reduc- around $45-55bn, and continue growing until
tions, both in our operations and for end users of 2025.

MSC Expansion Plans

Source: Aramco

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