Rare Glimpse Into the Finances of the World's Most Profitable Company - Bigger Than Apple and Exxon Combined

Saudi Aramco’s net profits reached $111 billion last year, compared to Apple's $60 billion in its last full year, Royal Dutch Shell's $23 billion and Exxon Mobil's $21 billion

A view shows Saudi Aramco's Manifa facility, Saudi Arabia June 14, 2015. Picture taken June 14, 2015
Saudi Aramco/Handout via REUTERS

Saudi Aramco’s net profits reached $111 billion last year, according to an assessment published Monday by Moody’s Investors Services that offered a rare glimpse into the state-owned oil firm’s finances before it issues its first bonds in international markets.

That places Aramco ahead of some of the world’s most profitable firms. By contrast, Apple booked a net profit of about $60 billion in its last full year, Royal Dutch Shell had net income of $23 billion and Exxon Mobil $21 billion.

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Moody’s said the oil giant’s revenue hit $355.9 billion last year and that it produced 10.3 million barrels per day of crude oil in 2018.

In another assessment issued Monday, Fitch Ratings said Aramco posted profits of $224 billion before interest, tax, depreciation and amortization.

Moody’s said Aramco paid $58.2 billion in dividends in 2018 and $50.4 billion in 2017. It remains unclear exactly how these dividends are distributed within the Saudi monarchy and its ruling family.

Fitch said Aramco accounted for around 70 percent of the Saudi government’s budget revenue between 2015-2017, but it wasn’t immediately clear if that figure included the dividends mentioned by Moody’s.

In anticipation of a partial listing of Aramco on an international exchange, the Saudi government in 2017 reduced Aramco’s tax rate from 85 percent to 50 percent. Such moves are part of an effort by Saudi Arabia to create new income streams and lessen the government’s dependence on oil for revenue.

In their first-ever grade assessment for Aramco, Fitch issued the firm an A+ rating, while Moody’s gave it it’s A1 rating.

The ratings are considered investment-grade level and indicate low credit risk, but the agencies held off on issuing their top grades to Aramco due to strong links between the Saudi state and the company. Specifically, Fitch noted “the influence the state has on the company through regulating the level of production, taxation and dividends.”

The ratings agencies issued their reports on the same day that Aramco said it will start to meet with investors about selling its bonds which, if issued, would be priced in dollars and traded on the London Stock Exchange. The bonds are expected to help pay for Aramco’s $69 billion acquisition of majority shares in Saudi petrochemical firm SABIC from the kingdom’s sovereign wealth fund.

Fitch said its conservative forecasts show Saudi Aramco’s net debt rising to around $35 billion by 2021, after incorporating the SABIC transaction.

The $69 billion deal with SABIC pumps capital into the Public Investment Fund, which is overseen by Crown Prince Mohammed bin Salman.

Prince Mohammed has transformed the fund to back major development projects throughout the kingdom amid delays to an initial public offering of Aramco, which he’d touted as a way to raise capital for the PIF’s projects.

The deal was struck after the crown prince’s early efforts at attracting Western investors for his social and economic transformation plans suffered a setback following the killing of Washington Post columnist Jamal Khashoggi by Saudi agents inside the country’s consulate in Istanbul last year.