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Saudi Aramco shows $111bn net

FILE – In this Feb. 26, 1997 file photo, Khaled al-Otaiby, an official of the Saudi oil company Aramco, watches progress at a rig at the al-Howta oil field near Howta, Saudi Arabia. According to an assessment published Monday, April 1, 2019, by Moody’s Investors Services, the net profits of Saudi Aramco reached $111 billion last year. That places Aramco ahead of some of the world’s most profitable firms. In their first-ever grade assessment for Aramco, Fitch Ratings issued the firm an A+ rating, while Moody’s gave it it’s A1 rating ahead of its upcoming bonds sale. (AP Photo/John Moore, File)

DUBAI, UAE, April 1, (Agencies): Saudi Aramco’s net profits reached $111 billion last year, according to an assessment published Monday by Moody’s Investors Services that offered a rare glimpse into the state-owned oil firm’s finances before it issues its first bonds in international markets. That places Aramco ahead of some of the world’s most profitable firms. By contrast, Apple booked a net profit of about $60 billion in its last full year, Royal Dutch Shell had net income of $23 billion and Exxon Mobil $21 billion.

Moody’s said the oil giant’s revenue hit $355.9 billion last year and that it produced 10.3 million barrels per day of crude oil in 2018. In another assessment issued Monday, Fitch Ratings said Aramco posted profits of $224 billion before interest, tax, depreciation and amortization. Moody’s said Aramco paid $58.2 billion in dividends in 2018 and $50.4 billion in 2017.

It remains unclear exactly how these dividends are distributed within the Saudi monarchy and its ruling family. Fitch said Aramco accounted for around 70 percent of the Saudi government’s budget revenue between 2015-2017, but it wasn’t immediately clear if that figure included the dividends mentioned by Moody’s. In anticipation of a partial listing of Aramco on an international exchange, the Saudi government in 2017 reduced Aramco’s tax rate from 85 percent to 50 percent.

Such moves are part of an effort by Saudi Arabia to create new income streams and lessen the government’s dependence on oil for revenue. In their first-ever grade assessment for Aramco, Fitch issued the firm an A+ rating, while Moody’s gave it it’s A1 rating. The ratings are considered investment-grade level and indicate low credit risk, but the agencies held off on issuing their top grades to Aramco due to strong links between the Saudi state and the company.

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