Well, if you had any questions about whether Saudi Aramco was a massively profitable behemoth that can chew up and spit out your favorite multinational, those questions have been answered on Friday.
Apparently, Bloomberg has seen internal documents, giving the outside world the first glimpse at the company’s finances and by God, this looks like some impressive stuff.
For one thing, Aramco is the world’s most profitable company. So there’s that.
Their net income was nearly $34 billion in H1 2017. As Bloomberg notes, “the internal figures show Aramco’s income easily outstripping U.S. titans like Apple Inc., JPMorgan Chase & Co. and Exxon Mobil Corp.” Here you go:
It’s also debt free, a rather notable factoid considering the industry.
Oh, and their cost of production is like $4/bbl. That compares to $20/bbl for Exxon and Shell. So that’s pretty damn good. The comparison with Exxon and Shell is a joke – flat out:
The timing here is pretty interesting, coming as it does amid the ongoing IPO chatter and speaking of the IPO – who wants a piece of it now irrespective of where it lists?
Actually, it’s not all great news. As Bloomberg goes on to note, Aramco’s adjusted cash flow from operations was ~$52 billion in H1 2017 and the dividend to the government was $13 billion during the same period. When you look at those numbers against Shell and Exxon, you have to consider that they don’t pump nearly as much oil as Aramco.
The explanation there is simple. Here’s Bloomberg from the same article linked above:
The reason for the limited cash generation is tax: Aramco pays a 50 percent income tax and an additional variable royalty on revenue.
For their part, the Saudis had this to say:
This is inaccurate, Saudi Aramco does not comment on speculation regarding its financial performance and fiscal regime.
More to come.