Saudi Aramco Made Over $300B Last Year, Demand Exceeds $10B Expectation
For the first time since its establishment, Saudi Aramco has unveiled its highly-secretive revenue records, technically dethroning the United States' Apple as the world's most valuable company. The unveiling was triggered ahead of an upcoming massive bond sale.
Multiple outlets reported that in 2018, Saudi Arabia's state oil company made $356 billion in revenue while its annual net profit figures reached $111 billion. The numbers are almost twice what Apple made last year, the Star Tribune noted.
Previously, Saudi Aramco did not disclose any information to the public regarding its revenue and profit. The oil company had to reveal its earnings report as it puts up a bond sale. The latest reports suggested that the firm has received over $50 billion in bids.
According to Al Jazeera, unnamed sources close to the situation said the oil giant received bids exceeding $50 billion on its debut international bond sale - figures that are well beyond the expected $10 billion range. One of the sources said demand has even peaked at $60 billion. This would be the highest order book value yet.
Other sources indicated that investors were actually willing to bet their funds on the Aramco bonds despite the possibility that they obtain lower returns than when they bid for Saudi sovereign debt.
Analysts predicted that Saudi Aramco's success in the bond issue will be a pivotal factor in events that will take place around the state-owned firm's initial public offering (IPO) planned for 2021.
On Monday, Saudi's Minister of Energy, Khalid al Falih, said he is expecting increased demand for Aramco's first bond issuance attempt. According to CNBC, al Falih said during the Gulf Intelligence Saudi Arabia Energy Forum in Riyadh that the bond could reach "north of" $30 billion.
Aramco's bond issuance is part of the oil behemoth's scheme of raising funds for its plan to purchase a majority stake in Sabic, a petrochemicals company in Saudi. The purchase is reportedly at $69.1 billion. The bids are already building up and expectations are gradually rising.
It is worth noting that Saudi Aramco has received an A1 rating from Moody's and an A+ from Fitch. These ratings are translated by industry analysts as a sign that the giant oil company presents low risks for investors and could promise reliability.
Interest for Saudi Aramco has increased significantly since the company unveiled its revenue and profit figures. The Wall Street Journal noted that the firm's records indicate bigger returns than that of Exxon Mobil Corp. and Apple Inc. combined, solidifying the oil giant's position in the global oil industry.