Oil giant Saudi Aramco reported a sharp rise in first-quarter profit on Sunday, citing strong operational resilience and the ability to maintain exports despite disruptions to shipping through the Strait of Hormuz.
Adjusted net income climbed to $33.6 billion in the three months ended March 31, up from $26.6 billion a year earlier, while cash flow from operating activities edged down to $30.7 billion from $31.7 billion.
Free cash flow slipped to $18.6 billion from $19.2 billion, reflecting a $15.8 billion build-up in working capital. Capital expenditure rose to $12.1 billion as the company continued to invest in expansion projects.
Aramco's board declared a base dividend of $21.9 billion for the first quarter, up 3.5% from a year earlier, to be paid in the second quarter.
The company said its East-West Pipeline, which links oil fields in eastern Saudi Arabia to export terminals on the Red Sea, operated at its full capacity of 7 million barrels per day during the quarter. The route allowed Aramco to maintain exports via the kingdom's west coast and reduce its dependence on tanker traffic through the Strait of Hormuz.
Storage capacity helps
Aramco said its domestic and international storage capacity provided additional optionality. Strategic investment in critical infrastructure and robust contingency planning supported operational continuity and helped mitigate disruption, it said.
Aramco President & CEO Amin H Nasser said: “Aramco’s first-quarter performance reflects strong resilience and operational flexibility in a complex geopolitical environment. Our East-West Pipeline, which reached its maximum capacity of 7.0 million barrels of oil per day, has proven itself to be a critical supply artery, helping to mitigate the impact of a global energy shock and providing relief to customers affected by shipping constraints in the Strait of Hormuz.
“Recent events have clearly demonstrated the vital contribution of oil and gas to energy security and the global economy, and are a stark reminder that reliable energy supply is critical.
“Despite these headwinds, Aramco remains focused on its strategic priorities and is leveraging both its domestic infrastructure and its global network to navigate disruption. Our people have also demonstrated immense professionalism, determination, and expertise, enabling us to continue to deliver for our customers and shareholders.” - TradeArabia News Service