Saudi Aramco unveiled its first-half 2019 earnings on Monday, with a net income of $46.9 billion. This year's H1 earnings were significantly down from 2018's $53.02 billion, but the company said the revenue decline was due to both lower prices and weaker production.
According to CNBC, Saudi Aramco revealed that this year's 12 percent decline compared to the same period last year was due to the drop in average crude oil realized prices. In 2018, the average realized price stood at $69 while this year's per barrel price is at $66.
Another highlight of the report is Aramco's earnings before interest and taxes (EBIT). This year's EBIT stood at $92.5 billion for the first half. Last year, the company posted EBIT at $101.3 billion.
Some analysts received the news in shock, as they expected more of what is recognized as the world's most profitable firm. However, the oil producer still retained its place on top of the world despite the surprising decline.
On the other hand, the company continues to find ways through which it can capitalize on the growth. One of these aspects is acquisitions. "These acquisitions are expected to enhance dedicated crude placement, increase refining and chemicals capacity, capture value from integration and diversify our operations," Aramco president and CEO, Amin Nasser, said.
Among the acquisitions is a 20 percent stake in India's Reliance Industries' oil and chemicals business. The stake's selling is one of the biggest investments in India yet, opening doors for potential investments in the near future in this sector.
Technically, this is the second time that Saudi Aramco unveiled its earnings since it already publicized its revenue in 2018 earlier this year. However, it is worth noting that this is the first time Aramco laid out its half-year revenue on the table, for everyone to see.
Industry analysts speculated earlier this year that the reason why Aramco is allowing its previously tightly guarded financials to be accessed by the world is due to its plan to file for an initial public offering (IPO).
For several months after its reveal of 2018 earnings, there was silence from the firm's side as speculations about the IPO plan being shelved emerged. However, with the second earnings reveal completed, some industry experts believe the IPO plan will be pursued.
Saudi Aramco is the state-owned oil company that has received criticism at some point due to its strict guard over its financial statements. This year was the first time the firm allowed the public to look inside its financial progress.
Industry analysts are looking forward to how the company will work on engaging with international investors. It remains to be seen if the firm will extend a hand outside of Asia.
