The Saudi Aramco logo is pictured at the oil facility in Abqaiq, Saudi Arabia on October 12, 2019.
Maxim Shemetov | Reuters
Saudi state oil giant Aramco reported a staggering 288% increase in net income to $ 25.5 billion for the second quarter, while maintaining its dividend of $ 18.8 billion amid large oil prices from higher prices and a rebound benefit from global demand.
Aramco’s net income of $ 25.5 billion for the quarter compared to $ 6.6 billion in the same quarter of 2020. Earnings exceeded expectations, with analysts posting an average net income of $ 24.7 billion for the quarter expect.
“Our second quarter results reflect a strong recovery in global energy demand and we are moving into the second half of 2021 with more resilience and flexibility as the global recovery picks up,” said Amin Nasser, President and CEO of Aramco, in an am Corporate statement published on Sunday.
Aramco said net income for the first half was $ 47.2 billion, compared to $ 23.2 billion in the first half of 2020, an increase of 103%. The company said the results were supported by easing Covid-19 restrictions around the world, vaccination campaigns, stimulus measures and accelerating activities in key markets.
“Although the challenges posed by Covid-19 variants are still uncertain, we have shown that we can adapt quickly and effectively to changing market conditions,” said Nasser.
Aramco said free cash flow was $ 22.6 billion for the second quarter and $ 40.9 billion for the first half of 2021, compared to $ 6.1 billion and $ 21.1 billion, respectively. Dollars in the same time periods in 2020.
This is significant because free cash flow has now risen above the $ 18.75 billion quarterly dividend for the first time since the pandemic began. The improving outlook has led some analysts to call for a dividend increase.
“A dividend hike is needed to stay competitive,” BofA analysts said in a research note ahead of the results. “Higher oil prices and OPEC + -driven production increases should support a significant increase in free cash flow over the next few years,” she added.