Saudi Aramco reported a 288-percent increase in net profits for the second quarter of the year, to $25.5 billion, thanks to the rebound in oil prices spurred by growing demand.
The company also reported net profit of $47.2 billion for the first half of the year, a 103-percent increase on the year.
Free cash flow rose to $22.6 billion in the second quarter from $6.1 billion a year earlier. For the first half, free cash flow swelled to $40.9 billion from $21.1 billion a year earlier.
Thanks to this strong performance, the Saudi major declared a dividend of $18.8 billion for the second quarter that this time it might finance without resorting to loans.
"Our historic $12.4 billion pipeline deal was an endorsement of our long-term business strategy by international investors, representing significant progress in our portfolio optimization program," said chief executive Amin Nasser.
"Our landmark $6 billion Sukuk reinforced our robust balance sheet, further diversifying our funding sources and expanding our investor base. And, once again, we delivered a dividend of $18.8 billion for our shareholders."
Aramco sold a majority stake in its pipeline business to a consortium led by EIG Global Energy Partners for $12.4 billion earlier this year. Aramco Oil Pipelines Co. is a new business entity, formed to keep-or trade-the rights to 25 years of payments of rates for crude transportation across Aramco's pipeline network. According to EIG, the entity has an equity value of some $25 billion.
The company also debuted on international Islamic finance debt markets with a $6-billion issue in June to help fund its dividend, which stands at $75 billion on an annual basis. The debt comprised three tranches, with maturities of three, five, and ten years, respectively.
Meanwhile, as net profits rose, so did capital expenditure. Aramco spent $7.5 billion in the second quarter and $15.7 billion in the first half. The numbers represented an annual increase of 20 percent and 15 percent, respectively.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More