Oil giant Saudi Aramco said Sunday its profits soared more than 80% in the first three months of the year, as the state-backed company cashes in on the volatility in global energy markets and soaring oil prices following Russia’s invasion of Ukraine.
The bumper first-quarter earnings by the firm formally known as the Saudi Arabian Oil Co. show a record net income of $39.5 billion, up from $21.7 billion during the same period last year.
The figure marks the oil group's highest quarterly profit since 2019, when the Saudi government, which owns 98% of the company, listed a sliver of its worth on Riyadh’s Tadawul stock exchange.
In a statement, Aramco's chief executive appeared to suggest that the disruption from the war in Ukraine had underscored the vital role of oil and gas companies like Aramco.
“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," President and CEO Amin H. Nasser said, adding that Aramco was in the midst of increasing its maximum production capacity to meet anticipated demand growth.
Oil prices rallied to a 14-year high of $139 a barrel in March immediately after Russia’s invasion of Ukraine, although later receded as Russian oil continued to flow and renewed lockdowns hurt demand in China. International benchmark Brent crude traded over $111 a barrel Sunday.
Shares of Aramco were up 1.85% on Sunday following the earnings report, with a share costing 41.40 Saudi riyals, or $11.04 on the Tadawul stock market.
Aramco overtook Apple as the world’s most valuable company last week as higher oil prices pushed its shares to record levels, with the company's market cap at $2.43 trillion.
The oil group said it maintained its $18.8 billion cash dividend for the fourth quarter of last year — completing one of the biggest full-year cash dividends in the world. The payment is a crucial source of revenue for the Saudi government.
Gearing, which the company defines as the degree to which its operations are financed by debt, dropped from 14% at the end of last year to 8% in the first quarter.
The strong quarterly results come after resurgent economic activity and the relaxation of global coronavirus restrictions had already delivered record annual results for the state-backed company last year after the devastation of the pandemic.