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Mon 4 Nov 2019 01:02 PM

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Saudi Aramco's nine-month profit falls 18% as IPO starts

Aramco gave no explanation for the decline in its results

Saudi Aramco's nine-month profit falls 18% as IPO starts

Average Brent crude dropped about 11% over the nine-month period compared with the previous year.

Saudi Aramco’s nine-month profit fell 18% as lower oil prices eroded sales ahead of a share sale that could be the world’s largest.

The oil giant earned net income of $68.2 billion compared with $83.1 billion for the same period a year ago, it said in a statement posted on its website. The state company’s revenue slipped to $217 billion from $233 billion.

Aramco gave no explanation for the decline in its results, though its nine-month income alone exceeded the 2018 net posted by Apple Inc., the most profitable publicly traded company.

Average Brent crude dropped about 11% over the nine-month period compared with the previous year. Saudi Arabia has been cutting oil output along with other global producers to shore up prices amid a surplus and signs of weaker demand.

Aramco kicked off an oft-delayed initial public offering on Sunday, revealing potential tax cuts and dividends to lure investors. The Saudi government has conceded the company probably isn’t worth the $2 trillion valuation Crown Prince Mohammed bin Salman has long targeted.

Saudi Aramco’s $111 billion annual net income for 2018 made it the world’s most profitable firm. The Crown Prince is counting on those earnings and Saudi Arabia’s vast oil reserves - the world’s biggest deposits of conventional crude - to attract investors. The kingdom is seeking funds to build job-generating industries that it hopes will help wean the economy off of its overwhelming reliance on crude sales.

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