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Saudi Aramco full-year profit more than doubles on soaring oil prices

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A Saudi Aramco employee watches over the facility at Abqaiq (Saudi Arabia), October 12, 2019.

Maxim Shemetov | Reuters

Saudi Arabia’s oil giant Aramco posted record full-year earnings Sunday. It reported a nearly doubling of its year-on-year net profits to $110 billion.

Aramco’s 2021 net profit increased 124% from $49 billion to $110 billion. That’s a result of higher crude oil prices, better refining, chemicals margins and consolidation of its chemicals company, SABIC,’s full-year results. 

The numbers were in line with expectations, with analysts surveyed by Reuters forecasting net income of $109.7 billion for the full year.

Amin Nasser CEO Aramco stated in the results release that, “our strong results reflect our financial discipline, flexibility to evolving market conditions, and steadfast concentration on our long term growth strategy which targets growth value for our shareholders.”

The rise of oil

Aramco benefited from rising oil prices in 2021. Brent crude, the international benchmark, rose above $80 per barrel at the close of the year. This was an increase of roughly half a percent over the previous 12-months. A complex mix of factors, including supply shortages, created major uncertainty in the entire energy and commodities complex even before Russia invaded Ukraine.

 “Although economic conditions have improved considerably, the outlook remains uncertain due to various macro-economic and geopolitical factors,” he added.

Aramco has also announced a quarter-end dividend of $18.8 million, which will be paid the first quarter 2022. This dividend will be covered by an increase in free cash flow from $49.1 to $107.5 billion for 2020 to $107.5 billion for 2021. 

Aramco indicated that they would recommend that 4 billion dollars in retained earnings be used for bonus shares. This recommendation is subject to approval. The recommendation would see shareholders receive 1 bonus share per 10 shares. This means that the 2021 total dividend will include bonus shares and cash of $75 billion. 

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