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Saudi Aramco’s profits increase by 90% in Q2 to SAR 181 billion

Saudi Aramco's profits increased by 90% in the second quarter to SAR 181 billion

Saudi Arabian Oil Company “Saudi Aramco” earnings climbed by over 90% in the second quarter of 2022, to 181.6 billion riyals, compared to 95.47 billion riyals in the second quarter of 2021.
Aramco’s income increased 22.7% year on year, from 148 billion riyals in the preceding quarter.

Aramco earned 329.67 billion riyals in the first half of 2022, up from 176.9 billion riyals the previous year, representing an 86.35% increase.

According to the corporation, the rise in earnings for the second quarter is mostly attributable to an increase in crude oil prices and quantities sold, as well as an improvement in refining profit margins.

According to the firm, free cash flows increased by 53% in the second quarter to reach 129.8 billion riyals (34.6 billion dollars) and 244.7 billion riyals (65.2 billion dollars) in the first half of 2022, up from 84.7 billion riyals ($ 22.6 billion) and 153.2 billion riyals ($40.9 billion) for the same two quarters in 2021, respectively. This rise is mostly attributable to an increase in operating cash flow.

The return on average invested capital was 31.3% in the second and first half periods ending June 30, 2022, compared to 16.7% in the same two periods in 2021, reflecting an increase in crude oil prices and sold quantities, as well as an improvement in refining, processing, and marketing profit margins.

The firm is strengthening its financial position to retain a good credit rating for investment across market cycles. Indebtedness fell to 7.9% on June 30, 2022, from 14.2% on December 31, 2021, owing mostly to better operational cash flows from the downstream sector’s strong profitability and improved profit margins.

As part of the debt connected to the acquisition of a 70% share in SABIC in 2020, the business made a partial down payment to the Public Investment Fund. The initial quantities of the existing warrants were decreased by 45 billion riyals ($ 12 billion), in addition to a 30 billion riyal ($8 billion) cut in the first quarter of 2022.

Capital expenditures climbed by 25% in the second quarter to 35.1 billion riyals ($9.4 billion), and by 8% in the first half of 2022 to 63.5 billion riyals ($16.9 billion), compared to the same periods in 2021.

Saudi Aramco continues to look for ways to invest to capitalize on growth prospects, make progress in the strategic integration of the upstream and downstream sectors, expand its chemicals business, and pursue low-carbon options.

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