Inside the World’s Most Profitable Company

Gold Silver Reports (GSR) – Inside the World’s Most Profitable Company – Now, a first glimpse of the state oil giant’s finances shows Aramco churned out $33.8 billion in net income the first six months of 2017, easily outstripping U.S. titans like Apple Inc., JPMorgan Chase & Co. and Exxon Mobil Corp.                                 

News give investors the most extensive set of data yet to assess the possible value of a once-in-a-generation deal for financial markets: Aramco’s proposed initial public offering. And with Aramco generating the bulk of Saudi Arabia’s revenue, the accounts also provide sovereign bond investors with a unique insight into the kingdom’s financial health.

Asked to comment on the figures, Saudi Aramco said in a statement: “This is inaccurate, Saudi Aramco does not comment on speculation regarding its financial performance and fiscal regime.”

Among the most eye-catching facts: The company is almost totally free of debt and enjoys production costs running at a fraction of the industry standard, the figures show.

It’s a cornerstone of the global economy, producing and selling 10 million barrels of oil every day. Yet for four decades the financial performance of Saudi Aramco has been one of the biggest secrets in global business, limited to a tiny circle of executives, government officials and princes.

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But Saudi Arabia’s dependence on the company to finance social and military spending, as well as the lavish lifestyles of hundreds of princes, places a heavy burden on its cash flow. Aramco’s tax bill rises steeply as oil prices increase. Together with elevated capital spending, that’s likely to limit the scope for dividend payments after a share sale.

The accounts, prepared to an IFRS standard, also show Aramco’s sensitivity to oil prices. In the first of half of 2016, when crude averaged $41, the company made $7.2 billion in net income. This year, profits are likely to be significantly higher than 2017 after the recent rally in oil to more than $70 a barrel. – Neal Bhai Reports (NBR)

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Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600

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