Saudi Aramco posted a 39% yearly surge in net income for the third quarter and generated record free cash flow as higher oil prices and higher production helped it beat the analyst consensus.
Aramco, the world’s biggest oil firm in terms of both production and market capitalization, said on Tuesday that its third-quarter net income jumped by 39% year over year to $42.4 billion, while free cash flow surged to a record
$45.0 billion from $28.7 billion for the third quarter of 2021.
The profit from this past quarter is Aramco’s second-highest as a listed company, following the record $48.4 billion net income for the second quarter this year.
“Market conditions slightly softened in the third quarter as continued economic uncertainty driven by inflationary pressures slowed crude oil demand growth. Despite this, Aramco delivered strong earnings and record free cash flow reflecting its ability to generate significant value through its low-cost Upstream production and strategically integrated Downstream business,” Aramco said in a statement.
“While global crude oil prices during this period were affected by continued economic uncertainty, our longterm view is that oil demand will continue to grow for the rest of the decade given the world’s need for more affordable and reliable energy,” Aramco’s president and CEO Amin Nasser said, commenting on the Q3 results.
The top executive of the Saudi state oil giant also noted that “Against the backdrop of global underinvestment in our sector, we are extending our long-term oil and gas production capabilities while also working towards our previously stated ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions from our wholly-owned operated assets.”
Aramco declared a cash dividend of $18.76 billion for the third quarter, in line with its dividend policy to pay shareholders, the biggest of which with 98% is the Kingdom of Saudi Arabia.
With robust profit and record free cash flow, Aramco joins the international majors who reported strong and – in some cases – record earnings for the third quarter. Big Oil’s profits prompted renewed criticism from U.S. President Joe Biden who said on Monday that the record profits of the likes of Exxon were “a windfall of war” and if oil companies don’t increase output, “they’re going to pay a higher tax on their excess profits and face other restrictions.”
By Tsvetana Paraskova for Oilprice.com
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