The sale of bonds, launched to investors this week at a global roadshow, forced Aramco to uncover secrets that remained close since the nationalization of the company in the late 1970s.
The first official opinion of Saudi Aramco's financial performance confirms that the state's oil giant can generate a profit like no other company on Earth: last year's net profit was $ 111.1 billion, going very quickly to giants of the United States. , Apple Inc. and Exxon Mobil Corp..
But accounts published before the company's first appearance in the international bond market also show that Aramco, an organization producing around 10% of the world's raw, does not produce as much cash per barrel as other leading oil companies. like Royal Dutch Shell Plc.
The sale of bonds, launched to investors this week at a global roadshow, forced Aramco to uncover secrets that were still close since the nationalization of the company in the late 1970s, ruining the relationship between the kingdom and its most important asset. The Fitch Ratings and Moody's Investors Service have dedicated Aramco the fifth highest investment grade, the same as Saudi sovereign debt, but lower than the leading oil companies Exxon, Shell and Chevron Corp..
The company is preparing to increase the debt in part to pay for the acquisition of a majority share in the national petrochemical group Sabic, for an approximate value of $ $ 69 billion. The agreement is Plan B to generate money for Saudi Arabia's economic agenda after the deferral of Aramco IPO. In fact, the Crown Prince Mohammed bin Salman uses the company's balance sheet to fund his ambitions.
Aramco will pay 50% of the Sabic acquisition cost when the deal is closed and the rest in the next two years, according to a person who saw a presentation made to potential investors on Monday. Aramco refused to comment.
The dependence on the company's kingdom to fund social and military spending, as well as the luxury lifestyles of hundreds of princes, places a heavy burden on Aramco's cash flow. Aramco pays 50% of its income tax profits, along with a royalty rate starting at 20% of the company's income.
Aramco reported a cash flow from US $ 121 billion operations and US $ 35.1 billion in capital expenditure, and paid US $ 58.2 billion in dividends to the Saudi government in 2018, according to Moody's. In a presentation to potential bondholders, the company said the "common dividend" last year was US $ 52 billion. There was no immediate explanation for the gap between the two figures.
Aramco told potential bond holders that it had produced an active cash flow of US $ 121 billion in 2018. Although it is significantly higher than that produced by large oil companies, the difference is not as great as Ebitda or net income. . Shell, for example, noted a cash flow of US $ 53 billion, despite much lower gas and oil production than Aramco. Exxon reported last year's cash flow of US $ 36 billion.
The bond scheme, the credit rating and the publication of the first quotes from Aramco's accounts are part of Prince Mohammed's ambitions, which manage most power levers in the kingdom and wish to try IPO like part of her preparation plans. The country for the post-oil era. However, its ambition to obtain a US $ 2 billion valuation from global investors, which caused delays in the IPO, was rejected.
If successful, the proposal will raise a record $ 100 billion by selling a share of 5%, surpassing the $ 25 billion record raised by Chinese Internet retailer Alibaba Group Holding Ltd. in 2014.