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    2222   SA14TG012N13

SAUDI ARABIAN OIL COMPANY

(2222)
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Saudi Arabian Oil : Q3 interim report

11/03/2020 | 01:50am EDT

2020

Saudi Arabian Oil Company Third quarter interim report

For the three-month and nine-month periods ended September 30, 2020

Saudi Arabian Oil Company

1

Third quarter and nine months interim report 2020

Aramco at a glance

Third quarter 2020

Financial highlights

Net income

EBIT*

Earnings per share

Net cash provided by

(billion)

(billion)

(basic and diluted)

operating activities

(billion)

SAR 44.2

SAR 95.5

SAR 0.22

SAR 70.5

$11.8

$25.5

$0.06

$18.8

Capital expenditures

Free cash flow*

Average realized

Gearing*

(billion)

(billion)

crude oil price

(%)

($/barrel)

SAR 23.9

SAR 46.5

43.6

21.8

$6.4

$12.4

Dividends paid

Dividends paid per share

ROACE*

(billion)

(billion)

(%)

SAR 70.32

SAR 0.35

14.8

$18.75

$0.09

  • Non-IFRSmeasure: refer to Non-IFRSmeasures reconciliations and definitions section for further details.

2 Saudi Arabian Oil Company

Third quarter and nine months interim report 2020

Key results

Financial results

Third quarter ended September 30

SAR

USD*

All amounts in millions unless

2020

2019

2020

2019

otherwise stated

Net income

44,209

79,839

11,789

21,291

EBIT

95,477

165,479

25,461

44,129

Capital expenditures

23,934

30,352

6,383

8,094

Free cash flow

46,547

77,290

12,411

20,611

Dividends paid

70,320

50,212

18,752

13,390

ROACE1

14.8%

31.5%

14.8%

31.5%

Average realized crude oil

n/a

n/a

43.6

62.4

price ($/barrel)

  • Supplementary information is converted at a fixed rate of U.S. dollar 1.00 = SAR 3.75 for convenience only.

1. Calculated on a 12-month rolling basis.

Nine months ended September 30

SAR

USD*

All amounts in millions unless

2020

2019

2020

2019

otherwise stated

Net income

131,308

255,710

35,015

68,190

EBIT

274,905

512,378

73,308

136,635

Capital expenditures

75,106

84,615

20,028

22,564

Free cash flow

125,752

219,716

33,533

58,591

Dividends paid

190,865

224,175

50,897

59,780

ROACE1

14.8%

31.5%

14.8%

31.5%

Average realized crude oil

n/a

n/a

39.4

64.8

price ($/barrel)

  • Supplementary information is converted at a fixed rate of U.S. dollar 1.00 = SAR 3.75 for convenience only.

1. Calculated on a 12-month rolling basis.

CEO's statement

Aramco President & CEO Amin H. Nasser

We saw early signs of a recovery in the third quarter due to improved economic activity, despite the headwinds facing global energy markets. Meanwhile, we maintained our commitment to shareholder value by declaring a dividend of $18.75 billion for the third quarter.

Aramco's integration with SABIC is proceeding as planned. Our resilience is supported by our unique scale, low upstream carbon intensity and low production costs. As the global economic and social landscape evolves, these strengths and our continued drive to lower GHG emissions mean we are well positioned to support the energy needs of the global economic recovery.

We continue to adopt a disciplined and flexible approach to capital allocation in the face of market volatility. We are confident in Aramco's ability to manage through these challenging times and deliver on our objectives.

We are making progress on multiple fronts, including the world's first blue ammonia shipment for zero-carbon power generation in Japan - further strengthening our focus on new and innovative solutions that contribute to the global energy transition.

Saudi Arabian Oil Company

3

Third quarter and nine months interim report 2020

Third quarter highlights

The third quarter of 2020 saw early signs of a recovery in global energy markets as some governments across the world eased COVID- 19 related restrictions, providing stimulus for improved economic activity. The demand for crude started to rise, which was reflected in stronger crude oil prices, compared to the previous quarter. This increasingly favorable economic environment, together with Aramco's low cost of production and unique operating model, resulted in improved earnings and cash flows for the third quarter. These financial results demonstrate Aramco's resilience across volatile crude oil price cycles and are underpinned by its operational excellence and its position as one of the most reliable suppliers of crude oil to the world.

A dividend of SAR 70.32 billion ($18.75 billion) is declared for the third quarter (Q3 2019: SAR 50.21 billion ($13.39 billion)). This represents an increase of SAR 20.11 billion ($5.36 billion), despite weaker economic activity in the current quarter when compared to the same period in 2019, demonstrating Aramco's strength and resilience across economic cycles.

The COVID-19 pandemic has altered the way business is conducted around the world and Aramco responded swiftly by taking significant steps towards working under the current environment. Aramco's commitment to safeguarding its people and operations remains a key priority and it continues to review and improve its stringent safety procedures and risk mitigation initiatives. These include the regular sanitization of workplaces, implementation of physical distancing protocols and the use of digital technologies to promote a safe and efficient working environment.

Upstream

Notwithstanding the continued disruption caused by COVID-19, Upstream results experienced a significant improvement following the gradual increase in global crude oil prices and continued portfolio-wide optimizations during the third quarter of 2020, while continuing to safeguard our people and community.

Total hydrocarbon production for the first nine months of 2020 was

12.4 mmboed, including an average crude oil production of 9.2 mmbpd.

Significant Upstream developments in the third quarter of 2020:

  • Aramco achieved a historic single day natural gas production of 10.7 bscfd on August 6, 2020, from both conventional and unconventional fields;
  • Aramco's exploration activities resulted in two successful unconventional field discoveries in the northern part of the Kingdom; one field with both oil and gas reservoirs and another field with a gas reservoir; and
  • The World Economic Forum (WEF) recognized the Khurais facility as a leader in the adoption and integration of cutting-edge technologies of the Fourth Industrial Revolution (4IR), and it became Aramco's second facility to join WEF's prestigious Global Lighthouse Network - a select group of just 54 facilities worldwide leading in these technologies. Khurais, one of Aramco's largest oil fields, is a fully connected and intelligent field with technologies that include autonomous process control and remote operation and monitoring of equipment and pipelines.

Downstream

Downstream continues to focus on enhancing integration and creating growth opportunities across the hydrocarbon value chain.

Aramco maintained its position as one of the world's largest refining businesses, with gross refining capacity of 6.4 mmbpd as at September 30, 2020 (September 30, 2019: 5.4 mmbpd). In the first nine months of 2020, the Downstream segment consumed 39.5% (nine months ended September 30, 2019: 38.2%) of Aramco's crude oil production, which helps to ensure a secure and reliable supply of refined products to its customers.

Significant Downstream developments in the third quarter of 2020:

  • Following the successful close of the SABIC transaction, the third quarter of 2020 marks the first full quarter in which SABIC's financial results are incorporated into Aramco's Downstream results. Integration with SABIC continues to progress and drives forward the Downstream strategy of creating value from integration across the hydrocarbon value chain;
  • Aramco and the Institute of Energy Economics, Japan (IEEJ), in partnership with SABIC, successfully completed the world's first shipment of high-grade blue ammonia. Forty tons were dispatched from Saudi Arabia to Japan for use in zero-carbon power generation, reinforcing Aramco's focus on the reduction of CO2 emissions; and
  • The Company maintained its strong track record of supply reliability, despite disruptions caused by COVID-19, by delivering crude and other products in a timely manner with 100% reliability in the third quarter of 2020 (Q3 2019: 97.3%). This resilient performance was supported by Aramco Trading Company's (ATC) operational agility and logistics optimization.

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Saudi Aramco - Saudi Arabian Oil Company published this content on 03 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2020 06:49:06 UTC


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Technical analysis trends SAUDI ARABIAN OIL COMPANY
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TrendsNeutralBearishNeutral
Income Statement Evolution
Consensus
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Mean consensus HOLD
Number of Analysts 17
Last Close Price 34,90 SAR
Average target price 35,21 SAR
Spread / Average Target 0,89%
EPS Revisions
Managers and Directors
Amin bin Hasan Al-Nasser President, CEO & Executive Director
Khalid Hashim Al-Dabbagh Director, SVP-Finance, Strategy & Development
Yasir bin Othman Al-Rumayyan Chairman
Ahmad Abdul Rahman Al-Sa'adi Senior Vice President-Technical Services
Ziad Thamer Al-Murshed Vice President-International Operations
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