Oil giant Saudi Aramco posts 19% drop in first-quarter profit
DUBAI, United Arab Emirates — Saudi state oil giant Aramco on Tuesday reported a 19% drop in its first-quarter earnings, recording net income of $31.9 billion down from $39.5 billion the previous year amid falling oil prices.
Analysts expected to see a dip in net profit this quarter compared to the previous year, as inflation and rising interest rates pressure global demand and stoke fears of a recession. Still, Aramco’s net income beat expectations of $30.5 billion, which was forecast by analysts polled by Reuters.
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The company’s net profit was up 3.75% from the fourth quarter. It said that the weaker earnings result was offset by lower taxes and higher finance and other income. Shares rose 3.2% in early deals in Riyadh Tuesday.
Aramco’s first-quarter dividend, which was increased in the fourth quarter to $19.5 billion, will be paid in the second quarter, the company said. It reported its quarterly cash flow from operating activities at $39.6 billion and free cash flow at $30.9 billion, both of which were slightly up on the previous year.
Aramco, which is the world’s largest oil exporter, also revealed Tuesday that it will begin paying a performance-linked dividend on top of that $19.5 billion, and will target between 50% and 70% of its free cash flow figure. That dividend will be paid quarterly and at the sole discretion of the company’s board, depending on how the company performs, it said.
An offshore drilling platform stands in shallow waters at the Manifa offshore oilfield, operated by Saudi Aramco, in Manifa, Saudi Arabia, on Wednesday, Oct. 3, 2018.
Simon Dawson | Bloomberg | Getty Images
Aramco CEO Amin Nasser emphasized the value of its downstream strategy, which has seen it invest heavily in petrochemical and other operations.
“We are leveraging cutting-edge technologies to increase liquids-to-chemicals capacity and meet anticipated demand for petrochemical products,” Nasser said.
Nasser stressed the continued importance of hydrocarbons for the world’s energy needs, adding that “we believe oil and gas will remain critical components of the global energy mix for the foreseeable future.”
He said the company is “moving forward” with its capacity expansion, and that its “long-term outlook remains unchanged.”
Aramco posted a record net income of $161.1 billion for 2022 in March, up by 46.5% over the year.
Falling oil prices
Saudi Arabia’s Basic Industries Corporation (SABIC), which is one of the world’s largest petrochemical companies and is 70% owned by Aramco, this month saw its first-quarter net profit plunge 90% and warned that margins would remain under pressure amid new capacities, rising interest rates and uncertainty over global growth.
Oil and gas prices surged at the start of 2022, with Western sanctions on Russia following its full-scale invasion of Ukraine steadily tightening access to crude supplies. But this year, so far, is telling a different story for prices.
The price of international oil benchmark Brent crude is down 9% year-to-date and down more than 17% year-on-year. That fall stems from a combination of economic concerns.
Earlier this month, the U.S. Federal Reserve hiked interest rates by a quarter of a percentage point, raising investors’ concerns that slower economic growth could dent energy demand.
“Pressure from anti-inflationary action undertaken by both the U.S. Fed and the ECB [European Central Bank], have resulted in lackluster demand growth for most of the OECD, with recession risks lying ahead,” Citi’s global head of commodities research Ed Morse wrote in a note this week.
— CNBC’s Lee Ying Shan contributed to this report.
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On today’s budget-conscious episode of Quick Charge, we’re building up to the reveal of a new, more affordable Tesla Model Y tomorrow that will almost definitely not be a cheap pile of misaligned plastic body parts with inconsistent panel gaps that’s utterly incapable of turning the tide on Tesla’s global decline.
Plus, we’ve got news that Tesla is in hot water with California over its alleged mishandling of its insurance business, revisit the lies told about Cybertrucks drag racing Teslas, and look at the incredible 110% increase in EV sales over at GM that’s driving Cadillac’s renaissance.
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Waev Inc. has just unveiled the GEM eX, a new electric utility vehicle designed to bridge the gap between street-legal low-speed vehicles (LSVs) and true off-road work machines. The company calls it the most versatile electric work UTV yet.
Unlike most golf cart–based UTVs or high-speed recreational rigs, the GEM eX is purpose-built for commercial, industrial, and government fleets that need to move between city streets, job sites, and rough terrain, all while staying emissions-free.
The vehicle features a top speed of 25 mph (40 km/h) and is said to be DOT street-legal as an LSV on roads up to 35 mph (56 km/h), giving it a clear advantage over most off-road-only competitors.
Power is provided by a 6.5 kW motor in a rear-wheel drive setup with a limited-slip rear differential. An 8 kWh battery provides enough juice for a claimed maximum range of 85 miles (137 km).
The eX comes with several fleet-focused safety and utility upgrades, including 3-point seat belts, roof crush protection, backup camera, mirrors, pedestrian noise emitter, and a robust bumper system. It rolls on street, winter, or all-terrain tires, and the chassis features 9.5 inches (24 cm) of ground clearance, 6.5 inches (16.5 cm) of suspension travel, and a 50-degree approach angle for climbing curbs or crossing uneven work terrain.
Hill-hold assist and single-pedal descent control make it easy to handle on slopes, while a limited-slip differential helps maintain traction without chewing up turf.
In the back, a 1,250 lb (567 kg) composite dump box can fit a full-sized pallet and comes with gas-assist or electric lift options, while towing capacity matches that at 1,250 lb (567 kg). Optional hard doors, roll-down windows, and HVAC with heat and A/C turn it into a true all-weather workhorse.
The lithium iron phosphate battery pack is said to provide a long lifespan for extra durability in extreme climates from –20°F to 140°F (–29°C to 60°C). Charging is flexible via 120V, 240V, or J1772 public stations, and Waev backs the battery with a 7-year warranty – on par with many passenger EVs.
“We field-tested the GEM eX everywhere from Arizona deserts to Minnesota winters,” said Sven Etzelsberger, Waev’s Director of Engineering. “Every piece of customer feedback went back into this vehicle. The result is a work UTV that’s refined, reliable, and ready to go.”
The GEM platform has expanded significantly over the years, from its humble beginnings as a simple people mover to more recent adaptations into everything from ambulances and emergency vehicles to the new GEM eX electric UTV.
Priced at $24,955, the higher purchase price may be one of the few downsides to the quieter, cleaner, and easier to maintain alternative to traditional gasoline-powered UTVs.
Electrek’s Take
Waev’s new GEM eX seems to hit a sweet spot that’s been missing – a street-legal, electric work UTV tough enough for real jobs yet affordable and easy to maintain. For fleet managers juggling both paved and off-road environments, this could be a serious game-changer.
While the price is high, it comes in at significantly less than other well-known models like Polaris’ Zero-powered electric RANGER UTV.
At the same time, there are still more affordable options like those from KANDI that offer more power for a lower price. However, without GEM’s storied brand legacy and increased national support, cheaper options may not have the staying power to compete.
So sure, it’s expensive, but at least I’m glad to see more options coming to the market, especially from brands that have been around for years. Here’s to hoping for more affordable options in the future.
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