If you guessed Apple, you’d be wrong. The iPhone maker came in second with a profit of $59.53 billion. The most profitable company was Saudi Aramco, the national petrochemical company of Saudi Arabia. Rory Jones and Summer Said report for The Wall Street Journal:
The oil firm’s 2018 net income shot up from 284 billion riyals, or the equivalent of $75.9 billion, in 2017. By comparison, Apple Inc.’s equivalent profit was roughly $60 billion in its last full year; Amazon.com Inc. was $10 billion and Exxon MobilCorp. was $21 billion.
The three years of financial information contained in the prospectus illustrate how tightly Aramco’s profits are tied to oil prices. Aramco reported a significantly lower net profit in 2016 of $13.2 billion, the prospectus said, when prices fell to a monthly low of $31.90.
According to the prospectus, Aramco’s revenues were $355 billion in 2018, and its operating profit, before interest and tax, was %$212 billion
The numbers allow investors to evaluate the oil firm ahead of what could be the world’s biggest ever initial public offering. Saudi Crown Prince Mohammed bin Salman wants to attract capital to the kingdom as part of his plan to diversify its oil-dependent economy and has said he intends to list Aramco in 2021 after years of delays.
Prince Mohammed previously announced he would list 5% of Aramco in 2018 at a valuation of roughly $2 trillion, though that process was delayed due to concerns, among other issues, that the worth of the company wasn’t close to the royal’s estimate.
The figures released Monday by ratings firms indicate a much lower potential valuation for Aramco, up to about $1.4 trillion, according to analysts.
Aramco posted the massive earnings last year numbers despite taxes of roughly 50% to the government, which is highly reliant on contributions from the oil firm. Aramco also pays a royalty to the government of 20% of revenues up to $70 a barrel of oil, and the rate increases on a sliding scale at prices above that level. Fitch estimates that from 2015-2017, Aramco accounted for around 70% of the country’s revenues.
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