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Saudi Arabian Oil Co. (Saudi Aramco) continued to strengthen its balance sheet by reducing its gearing ratio to 8% by the end of Q1 2022, compared to 14% at the end of 2021.
In its Q1 2022 financial statement, the decline in gearing was a result of higher cash and cash equivalents, primarily attributable to stronger operating cash flows and cash proceeds in connection with Aramco’s gas pipeline transaction.
In line with the company’s prudent financial framework and focus on capital flexibility, Aramco decreased its total borrowings principally through a prepayment to the Public Investment Fund (PIF) in January.
Accordingly, the total outstanding principal amount of promissory notes was reduced by SAR 30 billion related to the acquisition of a 70% stake in SABIC. This led to a reduction in financing costs.
In its upstream business, the Saudi-listed firm made progress towards completing the Hawiyah and Haradh compression projects, as both are expected to come on-stream by the end of 2022.
The company also advanced the construction of Hawiyah Gas Plant expansion, part of the Haradh Gas Increment Program, which is expected to be on-stream in 2023.
The project is estimated to add a total capacity of 1.3 billion standard cubic feet per day (bscfd) of raw gas.
According to data compiled by Argaam, Saudi Aramco reported an 82% surge in Q1 2022 net profit after minorities to SAR 143 billion, compared to SAR 78.59 billion a year earlier.
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