Oil giant Saudi Aramco beats estimates with 30% hike in first-quarter profit

Oil tanks at an oil processing facility of Saudi Aramco, a Saudi Arabian state-owned oil and gas company, at the Abqaiq oil field.

Stanislav Krasilnikov | TASS via Getty Images

Oil giant Saudi Aramco reported a 30% jump in net income Tuesday, in a sign of a continued recovery from the previous year’s oil market crash that saw full-year earnings for the state firm slashed in half.

In a release published Tuesday, the company said net income rose to $21.7 billion in the first three months of the year, up from $16.6 billion in the same period last year.

It beat some analysts’ estimates of $17.24 billion, despite lower oil production in February and March. The figure nears the firm’s net income level in the first quarter of 2019, which was $22.2 billion.

Saudi Arabia’s behemoth oil producer also maintained its dividend, with $18.8 billion due to be paid out in both the first and second quarter.

The earnings reflect a dramatically improved climate for oil markets since the first quarter of last year, when Aramco reported a 25% fall in net income for the period as it grappled with the initial fallout of the coronavirus pandemic and cratering global demand.

The company said free cash flow in the first quarter was $18.3 billion, up from $15 billion over the same period last year. 

Aramco, like its global peers, has been navigating an uncertain oil price environment and unpredictable global economic recovery. The company described 2020 as “the most challenging year” in its history, and is now benefitting from the recovery in oil markets, with international benchmark Brent crude prices roughly double what they were this time last year. Refining and chemicals margins are also beginning to improve.

“The momentum provided by the global economic recovery has strengthened energy markets,” Aramco President and CEO Amin Nasser said Tuesday in a company press release. He added that “some headwinds still remain,” but said: “Given the positive signs for energy demand in 2021, there are more reasons to be optimistic that better days are coming.”

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