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Aramco – The World’s Most Profitable Company

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The earnings of Saudi Arabia’s giant oil company have long been a mystery, kept under wraps by the country’s government. But on Monday, 1st of April Saudi Aramco opened its books, revealing that it generated $111.1 billion in net income last year, making it probably the world’s most profitable company by far.

It handily beat Apple ($59.5 billion in net income in 2018) and ran laps around other oil companies like Royal Dutch Shell ($23.9 billion) and Exxon Mobil ($20.8 billion). The disclosure reveals a company that is hugely profitable but also tightly bound to one country and the price of oil.

Aramco issued the financial data as it prepares to borrow up to $15 billion through a bond sale, in what could signal a more aggressive approach to capital-raising for both the company and Saudi Arabia, which is seeking to cut its dependence on oil and gas revenue.

The money will help finance Aramco’s $69 billion purchase of most of a state-owned petrochemical company from Saudi Arabia’s sovereign wealth fund, whose chairman is Crown Prince Mohammed bin Salman.

The crown prince wants to diversify Saudi Arabia’s economy, and the sovereign wealth fund has been investing in technology companies like Uber and Tesla as a way of doing so. A planned stock sale by Aramco was expected to raise money for that purpose, but it was postponed last year.

The sale of a stake in Saudi Basic Industries, the petrochemical company, appears to be Aramco’s chief executive, Amin Nasser, has said that the company is pursuing international acquisitions in areas like liquefied natural gas, a chilled fuel that can be transported globally on ships like oil.

The financial results also show how the company’s fortunes rise and fall with the price of oil. In 2016, for instance, a time of low prices, the company reported only $13.3 billion in net income. Source Reuters

Crown Prince Mohammed Bin Salman

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