Saudi Aramco beats quarterly profit forecast, maintains dividend

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Riyadh, May 4 (BNA): State-run oil producer Saudi Aramco (2222.SE) surpassed analysts’ estimates on Tuesday with a 30% increase in first-quarter net profit and continued to pay dividends, aided by strong oil prices.


The earnings of global energy companies like Exxon Mobil (XOM.N) have soared due to crude oil prices rising by nearly a third this year as fuel demand recovered from the pandemic and global crude oil contraction surplus, Reuters reported.


“Given the positive signals of energy demand in 2021, there are more reasons to be optimistic about the future of better days,” said Amin Nasser, CEO of the world’s largest oil exporter.


“And with some winds still going on, we are well placed to meet the world’s growing energy needs as economies start to recover,” he said.


Net income increased from $ 16.7 billion in the previous year to $ 21.7 billion in the quarter through March 31. Aramco was estimated to generate a net profit of $ 19.48 billion, according to an average based on the estimates of five analysts.


Listed in 2019 with the sale of a 1.7% stake predominantly to Saudi public and regional agencies, Aramco said stronger crude oil prices and higher refining and chemical margins helped to compensate for lower production and increased earnings.


The Organization of Petroleum Exporting Countries, an alliance that groups Russia and several other producers, the OPEC + group lowered production to support prices, but in April agreed on a plan to start gradually easing these sidewalks from 1 May.


As part of this agreement and as a result of additional voluntary production cuts by Saudi Arabia, Aramco said global demand for petroleum products had recovered from lows in 2020 but remained below pre-epidemic levels.


Aramco announced a dividend of $ 18.8 billion for the first quarter, which should be paid in the second quarter, in line with the company’s forecast of $ 75 billion in dividends this year.


Aramco said he expects capital expenditures to be around $ 35 billion in 2021, compared to the original forecast of $ 40 billion to $ 45 billion.


Aramco’s average total hydrocarbon production came in the first quarter of 2021 at 11.5 million barrels of oil equivalent per day. This includes 8.6 million barrels of crude oil per day.


Saudi Crown Prince Mohammed bin Salman said more Aramco shares could be sold in the next year or two, including international investors. He said the kingdom is in talks to sell 1% to a leading global energy company.


Last month, he announced a new initiative called Shareek or Partner, where major Saudi companies, including Aramco, will lead private sector investments in the local economy for the next 10 years.


In a stock rating given to customers, HSBC said the move could constrain the gap for dividends to rise dramatically over the next few years.