Saudi Aramco, the state-run oil company of Saudi Arabia, reported an impressive 46.5% increase in net income for 2022, reaching a record $148.5 billion in free cash flow, up from $107.5 billion the previous year.
This remarkable growth in profits can be attributed to the surge in oil prices following Russia’s invasion of Ukraine, which resulted in western sanctions and a tightening of access to Moscow’s oil supplies, particularly seaborne crude and oil products.
“This is probably the highest net income ever recorded in the corporate world,” Aramco CEO Amin Nasser said on a Sunday earnings call.
Aramco CEO, Amin Nasser, expressed cautious optimism during a recent earnings call, stating that the company is anticipating markets to remain tightly balanced in the short to mid-term. Nasser cited China’s reopening, the pickup in jet fuels, and limited spare capacity as reasons for this positive outlook.
To reward its shareholders, Aramco raised its fourth-quarter dividend by 4% to $19.5 billion, which will be paid in the first quarter of 2023, and also announced that eligible shareholders will receive bonus shares as a result.
Furthermore, the company reaffirmed its commitment to investing in increasing its maximum production capacity to 13 million barrels a day by 2027. Aramco’s capital expenditure rose by 18% to $37.6 billion in 2022 and is expected to increase to $45 billion to $55 billion in the coming years, with anticipated increases until around the middle of the decade.
The news of Aramco’s strong financial performance is significant, highlighting the importance of a stable and reliable supply of oil to meet the world’s growing energy needs. It is likely to have a positive impact on the global oil market and the wider economy.In summary, Saudi Aramco’s record-breaking profits for 2022 are a testament to the company’s resilience and strategic planning in the face of challenging geopolitical circumstances. With ongoing investment in capacity and the continued demand for oil, Aramco remains a major player in the global energy industry.
