The Aramco Exhibit is shown at the 2018 North American International Automobile Automobile show January 16, 2018 in Detroit, Michigan. More than 5,100 journalists from 61 countries participate in NAIAS every year. (Bill Pugliano / Getty Images)
- Aramco of Saudi Arabia, a Saudi state oil company, entered its first international bond on Monday with high profits.
- The company earned $ 1.5 trillion in net income last year, according to Moody's, which makes it more profitable than Apple, Amazon and Google's parent company Alphabet together.
- Aramco is issuing a R141 billion bond to investors after doubling its profits in 2018 due to better oil prices.
Saudi Arabia's state oil company blows the rest of the world out of the water with its gigantic profits.
Saudi Aramco reported R1.5 trillion in net profit last year, according to Moody's, making it more profitable than Apple, Amazon and Alphabet combined. The company filed a request for international debentures on Monday, an issue of R141 billion after doubling its profits after oil prices rose last year.
Contextually, Apple's profits soared to $ 851 billion last year, while Amazon brought in $ 141 billion in profits, making Aramco's numbers stratospheric by comparison. Likewise, the major oil companies Exxon Mobil and Royal Dutch Shell made profits of R295 billion and R $ 240 billion in 2018, emphasizing the immensity of Aramco.
The credit rating of the company, Moody's A1, is linked to that of Saudi Arabia, due to the huge intrinsic links between the two entities.
"The company is fully owned by the state and should remain largely under government ownership even after any initial public offering of shares in the future," Moody's said. "The oil sector also comprises a substantial part of Saudi Arabia's GDP and dominates its exports."
It is the first major opportunity for investors to evaluate the offerings of one of the world's largest energy companies, given the generally secretive nature of Aramco's disclosures. It is part of a transparency effort on behalf of Saudi Arabia as part of a non-willingness on the company's IPO plans, which was shelved last year. One of the main advantages of issuing the title is to get high rankings from various credit bureaus. (Aramco does not need the money, after all.)
Among the key risk factors presented by the company are environmental issues and other challenges related to climate change, indicating a broad understanding of the multiple demand constraints faced by the oil and gas industry. Saudi Aramco has produced roughly one in eight barrels of crude oil produced globally from 2016 to 2018, according to the prospectus.
Oil prices were boosted last year after Saudi-led efforts at an OPEC + meeting secured supply cuts in an attempt to improve falling prices, drawing about 1.2 million barrels a day from the market.
Saudi Arabia is trying to shift its economy away from hydrocarbons in order to diversify its heavy economy and attract new capital into the Kingdom.
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