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Oil giant Saudi Aramco surpasses forecasts with 30% first-quarter profit increase

Oil tanks at an oil facility of Saudi Aramco, a Saudi Arabian state oil and gas company, at the Abqaiq oil field.

Stanislav Krasilnikov TASS via Getty Images

Oil giant Saudi Aramco on Tuesday reported a 30% jump in net profit, a sign of continued recovery from the collapse of the oil market from the previous year, in which profits for the state-owned company fell by half throughout the year.

In a statement issued Tuesday, the company said net profit rose to $ 21

.7 billion in the first three months of the year from $ 16.6 billion in the same period last year.

It beat some analysts’ estimates of $ 17.24 billion, despite lower oil production in February and March. The figure is close to the company’s net income level in the first quarter of 2019, which was 22.2 billion dollars.

The Saudi oil producer also kept its dividend, with $ 18.8 billion to be paid in the first and second quarters.

Profits reflect the dramatically improved climate for oil markets since the first quarter of last year, when Aramco reported a 25% drop in net income for the period as it tackled the initial effects of the coronavirus pandemic and cratering global demand.

The company said free cash flow in the first quarter was $ 18.3 billion, up from $ 15 billion for the same period last year.

Aramco, like its global counterparts, is heading into an uncertain environment of oil prices and an unpredictable global economic recovery. The company has identified 2020 as “the most challenging year” in its history and is now benefiting from the recovery in oil markets, with Brent’s international crude oil reference prices roughly doubling from last year. The margins for refining and chemicals are also starting to improve.

“The momentum provided by the global economic recovery has strengthened energy markets,” Aramco President and CEO Amin Nasser said in a press release on Tuesday. He added that “there are still some side winds”, but said: “Given the positive signs of energy demand in 2021, there are more reasons to be optimistic that better days are coming.”

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