👑Saudi Aramco 24Q1

You got to wonder what they do with all that money?

Author

Connor Clark
July 04, 2024 • Estimated Reading Time: 4 minutes

In this edition, we will go through the Saudi Aramco 24Q1 financial statement. By reading this, you can quickly visualise how Aramco makes money and its financial health. And you’ll learn the answer to the age-old question: what they do with all their money.

Today in a snapshot:

📈Financial Performance: U$27.3B in net profit with a total margin of 23%.
💵 Cashflow: Operation and investing activities are cashflow positive, netting U$12B into the kitty.
⚖️Balance Sheet: A L/A ratio of 31%, which is much lower than its peers.

Income Statement

Income Statement 2024 Q1

I often fail to comprehend the difference in scale between 1 million and 1 billion. One way I use to put it in perspective is to convert the number into seconds. For example, 1 million seconds is about 11.5 days. Whereas 1 billion seconds is shy of 32 years, which, as you can see, is quite a significant change. However, if we look at Saudi Aramco’s net revenue of U$118.6B and convert it to time, you get a cool 3,771 years. If you went back in 3771 years, you’d find that the Wooly Mammoth is still alive and very much not extinct.

With a net profit of U$27.3B, Aramco achieved a total margin of 23.0%, down from 25.4% in 23Q1.

Upstream: Aramco produced 12.4 mmdoed of total hydrocarbon during this quarter. Construction activities continue in Dammam, Marjan, Berri and Zuluf, with sites to become fully operational in 2026/2027. Finally, work continues to meet the 2030 objective of increasing LNG production by 60%.

Downstream: Aramco utilised 51% of its crude oil production in its own downstream processing with a reliability of 99.7%. Furthermore, Aramco made its first retail acquisition in South America with a 100% stake in Esmax, a fuel and lubricant company in Chile.

Zakat - An Islamic financial obligation to donate a proportion of their wealth to charities. i.e. donations

Production

Total production comparison in millions of barrels of oil equivalent per day for 2024 Q1

I had to check the numbers a few times; I thought I had made a mistake. However, Aramco dwarfs the other producers by a considerable margin.

mmboed - million barrels of oil equivalent per day

Cashflow Statement

Cashflow Statement 2024 Q1

Cashflow is always a fun chart. Here, we can see what they do with their money. The primary item here is that Aramco’s investing activities are cashflow positive along with their operational activities. With this, Aramco added a further U$12B to their cash reserves, increasing them to U$65.1B (+23%).

Balance Sheet

Balance Sheet 2024 Q1

Aramco has a considerable amount of equity compared to its peers. With L/A ratio of 31%. This is lower than its peers, who operate around the 45%-60% range.

L/A - Liabilities to Assets Ratio. This is a solvency ratio where a lower number indicates limited to no liabilities issues and is usually a good sign.

Equity Walk 2024 Q1

An equity walk is a new chart that I will be introducing. It shows the change in total equity. Here, we can see it has slightly eroded due to the issuing of dividends being more significant than the net comprehensive income.

Cheers,

Connor

All data can be found on the Saudi Aramco Investors website.