Saudi Aramco’s stunning profits

The world’s most profitable company in 2018 wasn’t Apple or Amazon but Saudi Arabia’s state oil company, said Rory Jones and Summer Said in The Wall Street Journal. The kingdom-owned Saudi Aramco said its income was $111 billion, which dwarfs that of Apple ($60 billion) and of Exxon Mobil ($21 billion). Despite taxes of roughly 50 percent, Aramco’s figures “painted a picture of a company with unmatched financial heft.” The details were revealed for the first time this week in a prospectus for a $10 billion bond sale. But some believe the disclosures were a “coming-out party” before Saudi officials list the world’s largest oil producer publicly.

The “eye-watering” profits still leave plenty of questions, said David Sheppard and Robert Smith in the Financial Times. The bond sale should help pay for Aramco’s $69 billion stake in SABIC, Saudi Arabia’s national petrochemicals firm. That could signal Aramco recognizes a need to diversify “to keep thriving even if oil demand eventually enters a slow decline.” But if it’s going to rival Shell or Mobil, “investors will want to learn about more than profits.” They’ll want to know how reliant the Saudi government is on Aramco’s hefty taxes and dividends, and be sure it’s not just a “cash cow for the Saudi state.”