The Saudi Arabian Oil Company yesterday announced its second quarter 2021 financial results, reporting a 288% increase in net income from the same quarter of last year to $25.5 billion and declaring a dividend of $18.8 billion. The company’s net income for the first half of the year was $47.2 billion, representing a 103% increase over the same period in 2020.

 

The results were primarily driven by higher oil prices and a recovery in worldwide demand, supported by the global easing of COVID-19 restrictions, vaccination campaigns, stimulus measures and accelerating activity in key markets. 

 

Commenting on the results, Aramco President & CEO Amin H. Nasser, said, “Our second quarter results reflect a strong rebound in worldwide energy demand and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery gains momentum. While there is still some uncertainty around the challenges posed by COVID19 variants, we have shown that we can adapt swiftly and effectively to changing market

conditions.

 

“Our historic $12.4 billion pipeline deal was an endorsement of our long-term business strategy by international investors, representing significant progress in our portfolio optimization program. Our landmark $6 billion Sukuk reinforced our robust balance sheet, further diversifying our funding sources and expanding our investor base. And, once again, we delivered a dividend of $18.8 billion for our shareholders.

 

“We continue to move forward on a number of strategic programs, which focus on sustainability and low-carbon fuels, maximizing the value of our assets, and advancing our downstream integration and expansion journey. For all these reasons and more, I remain extremely positive about the second half of 2021 and beyond.”

 

Aramco’s net income was $25.5 billion in the second quarter of 2021, compared to $6.6 billion in the same quarter of 2020. Net income for the first half of 2021 was $47.2 billion, compared to $23.2 billion in the first half of 2020. The increase in both periods was primarily driven by higher crude oil prices, improved downstream margins and the consolidation of SABIC’s results, partially offset by lower crude oil volumes sold and higher crude oil production royalties.

 

Free cash flow was $22.6 billion in the second quarter and $40.9 billion for the first half of 2021, compared to $6.1 billion and $21.1 billion, respectively, for the same periods in 2020. 

 

Capital expenditure was $7.5 billion in the second quarter and $15.7 billion for the first half of 2021, representing an increase of 20% and 15%, respectively, compared with the same periods in 2020. This increase was primarily due to the start of initial phases of construction and procurement activities relating to increment projects, demonstrating the company’s ability to mobilize capital to target growth opportunities, and the consolidation of SABIC’s capital expenditure. At the same time, the company maintains a highly disciplined and flexible approach to capital allocation, and continues to expect its 2021 capital expenditure to be approximately $35 billion.