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Oil giant Saudi Aramco: Company makes $700 million in profit every single day

Oil giant Saudi Aramco: Company makes $700 million in profit every single day

Oil giant Saudi Aramco made an astonishing $700 million in profit every single day, the biggest quarterly profit of any publicly listed company in history.

The Saudi Arabian petroleum and gas company reported an eye-watering $68 billion (US$48.4 billion) of profit in the second quarter of 2022.

Its earnings were boosted by surging demand as Covid-19 restrictions were dropped around the world — and pushed even higher by Russia’s invasion of Ukraine.

Net income leapt 90 per cent year-on-year for the world’s biggest oil producer, which clocked its second straight quarterly record after announcing $55.46 billion (US$39.5 billion) for Q1.

Aramco’s massive Q2 windfall was the biggest quarterly adjusted profit of any listed company worldwide, according to Bloomberg.

The state-owned Saudi firm heads a list of oil majors raking in massive sums after ExxonMobil, Chevron, Shell, TotalEnergies and Eni also revealed multi-billion-dollar profits in Q2.

US President Joe Biden blasted ExxonMobil earlier this year as inflation surged, stating it made “more money than God”.

And the future looks bright for Saudi Aramco.

“While global market volatility and economic uncertainty remain, events during the first half of this year support our view that ongoing investment in our industry is essential,” Aramco president and CEO Amin Nasser said.

“In fact, we expect oil demand to continue to grow for the rest of the decade,” he added.

Net income rose 22.7 per cent from Q1 in “strong market conditions”, Aramco said.

Half-year profits were $123.41 billion (US$87.9 billion), up from $66.27 billion (US$47.2 billion) for the same period of 2021.

Aramco will pay a $26.39 billion (US$18.8 billion) dividend in Q3, the same as it paid in Q2.

It “continues to work on increasing crude oil maximum sustainable capacity from 12 million barrels per day to 13 million by 2027”, its earnings announcement said.

The quarterly profits, the highest since Aramco’s record-breaking IPO in 2019, beat a company-compiled analyst forecast of $64.86 billion (US$46.2 billion).

Aramco shares closed down 0.9 per cent at 40.5 riyals ($15.16) on the Saudi stock exchange. They are up 25 per cent this year.

‘crown-jewel’

Aramco floated 1.7 per cent of its shares on the Saudi bourse in December 2019, generating $41.28 billion (US$29.4 billion) in the world’s biggest initial public offering.

The “crown jewel” and leading source of income for the conservative kingdom temporarily supplanted Apple as the world’s most valuable company in March. It now lies second in the list with a market valuation of $3.37 trillion (US$2.4 trillion).

Saudi Arabia has sought to open up and diversify its oil-reliant economy, especially since Mohammed bin Salman’s appointment as crown prince and de facto ruler in 2017.

Despite raising production, Aramco has pledged to reach “operational net zero (carbon) emissions” by 2050. Carbon pollution is tallied in the country that uses the fuel, not where it is produced.

Saudi GDP jumped nearly 12 per cent in Q2 on the back of high oil prices, the government announced last month.

Abu Dhabi-based energy expert Ibrahim Elghitany said the oil bonanza was a “golden opportunity” for the country.

“Saudi Arabia has recently achieved financial surpluses that it did not achieve during the last decade, which helps to provide financing for its development projects,” Elghitany told AFP.

Nasser said Aramco recovered quickly from a series of attacks by Yemen’s Huthi rebels on its facilities earlier this year, including a dramatic strike in Jeddah that sent smoke billowing during a Formula One practice session in March.

“We were able to restore our production in all these facilities immediately. In a few weeks, all facilities were working and producing at full capacity,” he told a media conference call.

Oil prices have dropped by $42 per barrel from a peak in June due to growing supplies, but remain close to $140 (US$100).

The OPEC group of oil-producing countries has been gradually raising production, despite pressure from Western leaders including US President Joe Biden — who visited Saudi Arabia last month — to pump more.

Biden’s trip was seen as a climb-down after he previously promised to make Saudi Arabia a “pariah” over the killing of Washington Post columnist Jamal Khashoggi by Saudi agents in Turkey in 2018.

British Prime Minister Boris Johnson has also visited Saudi Arabia since the Russian invasion in February.

High oil prices are contributing to the inflationary pain suffered by consumers worldwide.

– with Andrew Backhouse, AFP

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Online brokerage company Robinhood lays off almost a quarter of its staff

Online brokerage company Robinhood lays off almost a quarter of its staff

A US online trading platform, which experienced a boom in customers during the pandemic, has slashed its staff by 23 per cent after being hit by the cryptocurrency market crash and record inflation.

It’s the second round of staff sackings for the company called Robinhood, which laid off 9 per cent of its 3,900 employees in April.

Yesterday’s announcement saw the company shed 23 per cent of remaining positions — about 815 jobs — meaning the company will have sacked more than 1000 employees in a matter of months between the two rounds of redundancies. Roles in operations, marketing and program management the most impacted by yesterday’s decision.

Robinhood was embroiled in the Gamestop controversy early last year when Reddit renegades and amateur investors blew up the share price of the brick-and-mortar video game retailers, but this momentum has failed to continue.

Robinhood’s chief executive Vlad Tenev said that letting go of 9 per cent the workforce in April to focus on “greater cost discipline” for the organization “did not go far enough” in a blog post on the company’s website.

“Since that time, we have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody,” Mr Tenev said.

“Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the Covid era would persist into 2022.

“In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me.”

Last year, Robinhood grew from 700 roles at the end of 2019 to nearly 3,900 by the first half of 2021, but its 2,022 cuts take its total workforce down to 2,600.

Mr Tenev said staff would receive an email and Slack message with their employment status after the company wide meeting announced the redundancies on Tuesday.

He added the cuts were a “painful decision” and meant the company would be “parting ways with many incredibly talented people”, although staff would be given the opportunity to remain with the company until October 1.

Robinhood also revealed its second quarter results which showed its monthly active years plunged to 14 million down by 34 per cent from a year earlier.

Revenue also plummeted by a whopping 44 per cent to $US318 million ($A461 million).

Robinhood became a trading phenomenon during the pandemic as it offered an easy to use, mobile first platform and in the second quarter of last year it boasted more than 21 million active users who were keen to trade crypto and meme stocks.

But with lockdowns in the past, revenue tied to customer’s trading dropped 55 per cent in the latest quarter to $US202 million ($A292 million).

The company has also been slugged with a $US30 million ($A43 million) fine from the New York State Department of Financial Service for alleged violations of anti-money laundering and cybersecurity regulation in its cryptocurrency trading unit.

A global tech bloodbath has seen a spate of companies laying off staff.

In Australia a crypto company called Immutable, which valued at $3.5 billion, is facing a fierce backlash after sacking 17 per cent of its staff from its gaming division, while continuing to “hire aggressively” after raising $280 million in funding in March.

Meanwhile, Australia healthcare start-up Eucalyptus, which provides treatments for obesity, acne and erectile dysfunction fired up to 20 per cent of staff after an investment firm pulled its funding at the last minute.

Debt collection start-up Indebted sacked 40 of its employees just before the end of the financial year, despite its valuation soaring to more than $200 million, with most of the redundancies made across sales and marketing.

Then there was Australian buy now, pay later provider Brighte, that offers money for home improvements and solar power, which let go of 15 per cent of its staff in June, with roles primarily based on corporate and new product development.

Another buy now, pay later provider with offices in Sydney called BizPay made 30 per cent of its redundant workforce blaming market conditions for the huge cut to staffing in May.

Earlier this year, a start-up focused on the solar sector called 5B Solar, which boasts backing from former prime minister Malcolm Turnbull, also sacked 25 per cent of its staff after completing a capital raise that would inject $30 million into the business

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China mocks Scott Morrison, Australia’s ‘arrogance’ after ACCC gas report

China mocks Scott Morrison, Australia's 'arrogance' after ACCC gas report

China has branded Australia “laughable”, mocking the Government and former prime minister Scott Morrison in the wake of a “damning” gas report.

The comments were made as part of a scornful article published by the CCP-controlled Global Times.

The piece mocks a suggestion that Australia could step in and help with supply of liquefied natural gas (LNG) to European allies impacted by the Russia-Ukraine conflict.

At the start of 2022, the then-prime minister Mr Morrison said his government was looking at options that would allow Australia to fill international demand for gas if Russia stops exporting to Europe.

“Awkwardly, some in Australia are now warning of a potential shortage in the country and urging to set aside gas for Australia’s own electricity network before selling to the rest of the world,” the Global Times article noted.

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On Monday, the Australian Competition and Consumer Commission’s (ACCC) gas inquiry 2017-2025 interim report warned businesses could shut down and there could be a record shortage of gas in the southern states next year unless something is done about the nation’s energy crisis.

The ACCC predicted a 56 petajoule shortfall in east coast gas supply by 2023, a figure it called a “significant risk to energy security” that was equivalent to 10 per cent of expected domestic demand.

China said the situation currently facing Australia was both “laughable and serious”.

“Laughable, because this reflects Australian officials’ overconfidence and arrogance in making empty promises it cannot deliver; serious, because a potential move could significantly affect already disrupted global energy supplies, given that Australia is known as one of the world’s top LNG exporters,” the newspaper noted.

Russia’s ongoing invasion of Ukraine has seen international demand for LNG soar, with Beijing claiming a decision from Australia to impose export restrictions could “hurt some of its European and Asian allies the most”.

The article blasted Mr Morrison for his “empty promises” for saying Australia will help its allies when they are in need.

“It is clear that a possible reduction in Australia’s LNG exports would further exacerbate the global energy crisis and push up prices, while increasing the energy anxiety in countries that used to see Australia as a reliable source of supplies,” the Global Times said.

“Some of its allies may also be annoyed by Australia’s inability to actually offer help in areas where it apparently has an advantage.”

The article noted that China has recently made efforts to diversify its energy imports following recent tensions with Australia, with Beijing last year signing new LNG contracts with the US instead.

However, the outlet assured readers that any decision by Australia would not “fundamentally undermine” China’s energy security.

Government reacts to ‘damning’ gas report

Australia’s Resources Minister Madeleine King branded the new ACCC report as “damning” of gas exporters after it found they were not engaging locally “in the spirit” of the heads of agreement.

“We remain concerned that some (liquefied) natural gas LNG exporters are not engaging with the domestic market in the spirit in which the heads of agreement was signed,” the report said.

“LNG producers will need to divert a significant proportion of their excess gas into the domestic market.”

Ms King said gas producers “know” the report is “damning for them”.

“The ACCC report is damning, no doubt about it,” she said.

“It sets out patterns and instances of behavior that are clearly not acceptable in an environment where we do have an international and domestic energy supply crisis.”

The ACCC described the outlook for 2023 as “very concerning” with gas prices likely to increase.

“The outlook for 2023 is very concerning and is likely to place further upward pressure on prices, which could result in some commercial and industry users no longer being able to operate,” the report said.

“It could also lead to demand having to be curtailed.”

This shortfall will mainly affect NSW, Victoria, South Australia, the ACT and Tasmania, where “resources have been diminishing for some time”, though Queensland may also be impacted.

– with NCA NewsWire

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