Despite wildly fluctuating oil prices throughout much of last year as well as the way many countries are seeking to shift from fossil fuels to sustainable energy sources, Saudi Arabian petroleum firm Aramco hit a record annual net profit of around $161.4 billion for 2022.
The stated amount shows an increase of around 46% from the company’s 2021 net profit, and likewise reflects increasing energy prices, an improved profit margin for the company’s refined oil products, as well as an increase in volumes sold.
Aramco also reported an 18% increase in capital expenditures, reporting a total of $37.6 billion. Its financial team also projects corporate spending for this year to fall within the $45 billion to $55 billion range. The aforementioned amount will also cover any external investments made within 2023.
The company’s free cash flow likewise hit a record high of around $148.5 billion last year, considerably higher than the $107.5 billion reported in 2021.
Despite the fact that the world is now beginning to veer away from petroleum and natural gas as energy sources, Aramco’s chief executive officer Armin Nasser is confident that these will remain essential in the near future.
However, Nasser added that there is a genuine risk of underinvestment in the global energy sector. This could be impacted by surging fuel prices across the globe.
As a way of mitigating such a risk, the company is expanding its focus beyond oil and gas exploration, as well as chemical production. In this case, Nasser says that Aramco is in the process of investing in low- to zero-carbon generation technologies that could lead to a significant reduction in pollutant emissions.
$19.5 Billion in Dividends
The company also declared $19.5 billion in dividends for the fourth quarter of 2022, around 4% higher than it reported in the third quarter.
The distribution of bonus shares to eligible shareholders is currently being discussed by the company’s board. If approved, selected shareholders will receive one additional share for every ten they own.