Saudi Aramco made nearly $34bn in profit in H1 2017 – report

State oil giant Saudi Aramco made nearly $34bn in net income in the first half of last year placing it well ahead of some of the world’s biggest businesses, according to reports.

Bloomberg cited official figures for the number as the firm gets its books in order for an initial public offering.

Aramco’s profitability stood at $33.8bn in the first half of 2017, a period when Brent crude prices averaged $53 a barrel, compared to $28.9bn at US technology firm Apple and $14bn at its South Korean rival Samsung, according to Bloomberg.

In comparison, net income dropped to $7.2bn in the first half of 2016 when Brent crude averaged $41, Bloomberg said.

Based on these figures, the news service said Aramco’s profit was likely to be significantly higher in the first half of 2018 after the recent oil rally to more than $70 a barrel.

The Saudi government is hoping a 5 per cent listing of Aramco will raise $100bn and value the company at nearly $2 trillion.

Read: Saudi Aramco international listing may not happen

Some analysts suggest a $1 trillion to $2 trillion valuation is a more realistic estimate.

A combined listing on the Saudi stock exchange and another international market was originally planned this year but now appears more likely in 2019 or could be pushed back further.

Read: Saudi exchange counting on foreign funds to aid Aramco IPO

Bloomberg said the figures showed Aramco’s adjusted cash flow from operations stood at $52.1bn in the first half of last year compared to $21bn at Shell, which pumps a quarter of the 10 million barrels a day Aramco produces.

The company paid a cash contribution to the government of $13bn compared to payments to shareholders of $6.4bn at Exxon and $7.8bn at Shell.

However, Aramco pays a 50 per cent income tax and has an additional royalty on revenue that was altered in January last year to increase as oil prices rise.

Read: Saudi cuts Aramco income tax ahead of IPO

This is set at 20 per cent on oil liquids production up to $70 a barrel, 40 per cent between $70 and $100 and 50 per cent in excess of $100.

Other figures of note include the firm’s CAPEX of $14.7bn in the first half of last year, well in exces of the $8bn and $9bn spent by Exxon and Shell.

Aramco was also found to have productions costs of less than $4 a barrel, compared to as high as $20 for its rivals, and was said to be nearly debt free with total borrowings of $20.2bn by the end of the first half of 2017 compared to cash and equivalents of $19bn.