Market Watch
News

What makes Aramco world's most profitable company?

Richie RichShutterstock.com
1/6
Richie Rich
Saudi Aramco on Monday showed it’s still the world’s most profitable company -- and paid out almost all its net income in dividends -- despite the dwindling price of oil.
On the top (of the world)Shutterstock.com
2/6
On the top (of the world)
Profit slid 12% to $46.9 billion in the first six months of 2019, the state-owned energy giant said in its first-ever half-year earnings report. That easily outstripped corporate titans such as Apple Inc., Amazon.com Inc. and other big oil producers, many of which suffered larger declines in profit as output and crude prices fell.

“We have some of the largest and most productive reservoirs on Earth,” Khalid Al-Dabbagh, senior vice president for finance, strategy and development, said in an interview. The company’s “unrivaled financial results” amid lower oil prices are “a testament to our resilience.”
$46 billion in payoutsShutterstock.com
3/6
$46 billion in payouts
Aramco paid out $46.4 billion in dividends in the first half. That included a $20 billion special payout to its owner -- the Saudi government -- which compares with a $6 billion payout last year. That’s of particular interest to potential investors ahead of an initial public offering planned for 2020 or 2021, though it may not be maintained, according to money manager T. Rowe Price Group Inc.
​IPO on the cards?Shutterstock.com
4/6
​IPO on the cards?
Aramco, officially known as Saudi Arabian Oil Co., published annual financial statements for the first time in April, ahead of a $12 billion bond sale. It’s now preparing for what could be a record IPO, putting the Damman-based company under even greater scrutiny from investors and inviting comparisons with other oil majors.
For how much?Shutterstock.com
5/6
For how much?
Saudi Arabia wants to raise a record $100 billion from selling a 5% stake in Aramco, which would make it the biggest IPO in history and a windfall for any banks that win a role. The kingdom has valued the company at a whopping $2 trillion, though the firm’s 2018 financials indicated a valuation closer to $1.2 trillion.
​Acquisition plansShutterstock.com
6/6
​Acquisition plans
Saudi Arabia announced plans for an Aramco IPO three years ago, but the sale was delayed to allow the company to acquire chemicals giant Saudi Basic Industries Corp. Aramco sold bonds to buy a 70% stake in Sabic from the kingdom’s sovereign wealth fund. And it showed Monday that’s it’s not done yet with acquisitions.

Aramco plans to buy a stake in the refining and chemicals business of India’s Reliance Industries Ltd. as it seeks buyers for its crude and diversification downstream.

The deal comes amid ambitious plans by Saudi Crown Prince Mohammed bin Salman, who runs the country day to day, to diversify the economy.
Text Size:AAA
Markets Data

*

Success
This article has been saved