Who is the "most profitable" company in the world?
Recently, the Saudi Arabia Aramco (Saudi Aramco) financial data, which was originally only visible to the company's management and some members of the Saudi royal family, was rarely disclosed. According to overseas media reports, Bloomberg disclosed Saudi Aramco’s financial results in the first half of 2017.The report shows that in the first half of 2017, Saudi Aramco made a net profit of US$33.8 billion, easily surpassed the US giants such as Apple and ExxonMobil, and became the world’s most profitable company. Even more dazzling is that Saudi Aramco has almost no debt burden.
In the first half of 2017, the U.S. apple company with the highest global market value was US$28.9 billion in the same period, which was 14.5% lower than Saudi Aramco. Generally, the cash flow and the amount of dividend payment are two key indicators for investors to evaluate the company's valuation. It is reported that when the average price of Brent crude oil was 53 US dollars per barrel in the first half of last year, Saudi Aramco obtained 52.1 billion US dollars in cash from its operations. During the same period, ExxonMobil's business cash flow was $15.2 billion. In terms of dividends, Saudi Aramco paid $13 billion in cash to its sole shareholder, the Saudi government, in the first half of 2017. In contrast, ExxonMobil and Shell’s dividend payments were $6.4 billion and $7.8 billion, respectively.
In addition, as of the end of the first half of 2017, Saudi Aramco borrowed a total of US$20.2 billion, but cash and cash equivalents totaled US$19 billion, which could be almost offset. In terms of investment, in the first half of 2017, Saudi Aramco’s capital expenditures were US$14.7 billion, far exceeding the US$8 billion and US$9 billion invested by Exxon Mobil and Shell in the same period.
Later, Saudi Aramco questioned the document and responded in a statement that “the figures disclosed in the document are inaccurate” and declined to comment on its financial status and fiscal system speculation. However, Bloomberg’s document has aroused great concern in the market because the market is currently talking about Saudi Aramco's time to market and the trend of oil prices.
In fact, the Saudi Crown Prince has already given Saudi Aramco a "topped" $2 trillion in market value. Saudi Arabia's goal is to raise about $100 billion through this "century trade." However, market analysts believe that Saudi Aramco's more reasonable valuation may be in the range of 1 to 1.5 trillion US dollars. "Only when the high oil prices and high production volumes are available, a market value of $2 trillion can become a reality," said Magnus, senior partner of Rystad Energy, an energy information company.
According to the plan, Saudi Aramco will conduct IPOs in its own trading market and international market. Hong Kong, New York, and London were shortlisted for the Saudi Aramco international listing. In January of this year, Amy Nasse, chief executive officer of Saudi Aramco, revealed at the Davos Forum that preparations for the company's local and international IPOs in the second half of 2018 were completed, and the Saudi government nodded in agreement. However, overseas media pointed out that because the financial advisor found that Saudi Aramco is difficult to reach a market value of $2 trillion, the company may postpone the IPO until 2019.
However, after three years of low prices, oil prices are slowly recovering and ushering in a bright future. On the 14th, local time, the United States, Britain, and France dropped more than 100 missiles on Syria and used chemical weapons against Syria to carry out military strikes. This military strike may further increase the rise in oil prices.
JP Morgan believes that if the United States and the European Union renew their sanctions on Iran, and the Western powers expand their missile strikes against Syria, the price of oil may hit 80 US dollars. Coincidentally, 80 US dollars has become a psychological "price point" for many institutional actors and even Saudi Arabia. However, the price of 80 US dollars may only last 3 to 6 months. Once the US shale oil re-occupies the market, everything will be reverted to its original shape.
Saudi Aramco's listing process>>>
Incentive period, quarterly expectation!