In 2018, Saudi Aramco earned three times more than Apple Inc

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In 2018, Saudi Aramco earned three times more than Apple Inc

Aramco revealed its financials in order to obtain a public rating and start issuing public international bonds

Monday April 1, 2019 8:43 PM, ummid.com News Network

Dubai: Saudi Aramco, the world’s biggest oil producer, made core earnings of $224 billion last year, almost three times as much as Apple, figures from the state-owned company showed on Monday ahead of its debut international bond issue.

Despite the huge profit, the state-owned oil giant was rated by credit agencies at par with Saudi Arabia, meaning the Kingdom’s economy will weigh on Aramco’s cost of borrowing as it prepares its bond market debut, news agency Reuters reported.

Rating agencies Fitch and Moody’s rated Aramco A+ and A1 respectively, but both said that without sovereign rating constraints Aramco would be in the same league as better-rated international oil companies like Exxon Mobil, Chevron and Shell. Fitch put Aramco’s standalone credit profile at “AA+.”

Credit ratings allow investors to compare and assess the credit quality of bond issuers and their debt securities, and are important in determining how much borrowers have to pay.

Saudi Aramco's net earning is also almost four times higher than the combined profits of 163 companies listed on the local stock exchange.

Aramco reported cash flow from operations of $121 billion and $35.1 billion in capital spending, and paid $58.2 billion in dividends to the Saudi government in 2018, according to Moody’s. In a presentation to potential bondholders, the company said its "ordinary dividend" last year was $52 billion. There wasn’t an immediate explanation about the gap between the two figures, according to Bloomberg.

Aramco revealed its financials in order to obtain a public rating and start issuing public international bonds. The planned bond deal is Aramco’s inaugural transaction in international markets. It still plans to launch an initial public stock offering or IPO in 2021, expected to generate $100 billion, having postponed its flotation from 2018.

The company will hold meetings with investors in coming days in cities including London, New York, Boston, Singapore, Hong Kong, Tokyo, Los Angeles and Chicago. Aramco picked banks including JPMorgan Chase & Co. and Morgan Stanley to manage the debt offering, Bloomberg said.

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