Net income adjusted for one-time items rose 0.8% to US$28 billion in the third quarter from a year earlier
[RIYADH] Saudi Aramco reported profit that beat analysts’ estimates as a boost in production outweighed the impact of weaker oil prices.
Net income adjusted for one-time items rose 0.8 per cent to US$28 billion in the third quarter from a year earlier, surpassing analyst estimates compiled by Bloomberg. Free cash flow also exceeded the dividend payout.
The surprise earnings show some of the strain on Aramco easing after a sequence of lower profit in the past couple of years. The company has been raising output as part of Opec+ policy that’s helped it counter muted crude. The world’s biggest oil exporter is a lynchpin of Saudi Arabia’s economy with revenue from oil sales and hefty dividend payouts supporting the kingdom’s multitrilion-dollar economic transformation plan.
Oil prices in London have declined 13 per cent this year to about US$65 a barrel, well below the more than US$90 that the International Monetary Fund says Saudi Arabia needs to balance its budget. It’s already translated into pullbacks in some major infrastructure and tourism projects in the kingdom, while Aramco has also slowed some domestic refining and chemical plans as it focuses on a mega natural gas development.
Aramco’s free cash flow – the funds left over from operations after accounting for investments and expenses – rose to US$23.6 billion in the quarter. The gearing ratio eased to 6.3 per cent as of Sept 30 from 6.5 per cent in the previous three months. BLOOMBERG
