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Saudi Aramco’s quarterly profit surges on oil price, volumes

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October 31, 2021

By Hadeel Al Sayegh and Saeed Azhar

DUBAI (Reuters) -Saudi Arabian state oil producer Aramco said on Sunday its third-quarter net profit more than doubled, boosted by higher crude oil prices and volumes sold, beating analysts’ forecasts.

The oil giant’s best quarterly earnings since its listing in December 2019 was fuelled by the strongest quarterly average crude prices since its shares began trading.

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Aramco shares were up 1% in early trade after the company disclosed its results and have risen about 9% this year to a market valuation of just over $2 trillion, a goal sought by de-facto Saudi leader Crown Prince Mohammed bin Salman before the company’s initial public offering.

Aramco’s net income jumped to $30.4 billion for the quarter to Sept. 30 from $11.8 billion a year earlier, it said in a bourse filing. That was above the median net profit forecast of $28.4 billion from four analysts.

“Our exceptional third quarter performance was a result of increased economic activity in key markets and a rebound in energy demand, as well as our unique low-cost position,” Amin Nasser, Aramco’s chief executive, said in a statement.

Rita Guindy, an analyst at Arqaam Securities, said the sequential earnings growth is mainly driven by the upstream segment – with a 12% quarter-on-quarter improvement in crude oil volumes at 9.6 million barrels per day and a higher oil price.

The company’s free cash flow rose to $28.7 billion from $12.4 billion. It declared a dividend of $18.8 billion for the third quarter, in line with its guidance.

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“There is good potential for a special dividend at the end of this year and that looks more and more likely now, in my view,” said Yousef Husseini, analyst at EFG Hermes, noting Aramco’s strong free cash flow and strong de-leveraging.

Oil prices have rallied to multi-year highs with global crude futures climbing 4.5% in the quarter, helped by the decision by OPEC+ to maintain its planned output increase rather than raising it on global supply concerns.

Brent oil futures are trading around $84.4 a barrel, up about 63% so far this year, while benchmark U.S. crude is at roughly $83.57 a barrel, up just over 70% over the same period.

Aramco’s market capitalisation is just below Apple’s market cap of $2.46 trillion, but above Alphabet’s $1.9 trillion valuation.

Of its major rivals, Exxon Mobil Corp also posted its highest quarterly net profit since the last quarter of 2017, while Royal Dutch Shell reported a third-quarter profit of $4.13 billion last week, below analyst forecasts, sending its share price lower.

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Aramco’s capital expenditure rose 19% from a year earlier to $7.6 billion in the quarter.

(Reporting by Hadeel Al Sayegh and Saeed AzharEditing by William Mallard and Frances Kerry)

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U.S. stock futures, oil regain some ground after Omicron battering

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November 29, 2021

By Wayne Cole

SYDNEY (Reuters) – Asian markets regained a little composure on Monday as investors settled in for a few weeks of uncertainty on whether the Omicron variant would really derail economic recoveries and the tightening plans of some central banks.

Oil prices also bounced $3 a barrel to recoup some of Friday’s shellacking, while the safe haven yen took a breather after its run higher.

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The new variant of concern was found as far afield as Canada and Australia as more countries imposed travel restriction to try to seal themselves off.

Britain called an urgent meeting of G7 health ministers on Monday to discuss developments on the virus, although a South African doctor who had treated cases said symptoms of Omicron were so far mild.

“There is a lot we don’t know about Omicron, but markets have been forced to reassess the global growth outlook until we know more,” said Rodrigo Catril, a market strategist at NAB.

“Pfizer expects to know within two weeks if Omicron is resistant to its current vaccine, others suggest it may take several weeks. Until then markets are likely to remain jittery.”

Trading was erratic early on Monday but there were signs of stabilisation as S&P 500 futures added 0.8% and Nasdaq futures 0.9%.

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Both indices suffered their sharpest fall in months on Friday with travel and airline stocks hit particularly hard.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1% but was off early lows. Likewise, Japan’s Nikkei pared early losses to be down 0.9%.

Bonds gave back some of their gains, with Treasury futures down 11 ticks. The market had rallied sharply as investors priced in the risk of a slower start to rate hikes from the U.S. Federal Reserve, and less tightening by some other central banks.

Two-year Treasury yields edged up to 0.55%, after falling 14 basis points on Friday in the biggest drop since March last year. Fed fund futures had pushed the first rate rise out by a month or so.

The shift in expectations undermined the U.S. dollar, to the benefit of the safe haven Japanese yen and Swiss franc.

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Early Monday the dollar had steadied somewhat at 113.81 yen, after sliding 1.7% on Friday. The dollar index held at 96.190, after Friday’s 0.7% drop.

The euro paused at $1.1294, following its rally from $1.1203 late last week.

European Central Bank President Christine Lagarde put a brave face on the latest virus scare, saying the euro zone was better equipped to face the economic impact of a new wave of COVID-19 infections or the Omicron variant.

The economic diary is also busy this week with China’s manufacturing PMIs on Tuesday to offer another update on the health of the Asian giant. The U.S. ISM survey of factories is out on Wednesday, ahead of payrolls on Friday.

Fed Chair Jerome Powell and Treasury Secretary Janet Yellen speak before Congress on Tuesday and Wednesday.

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In commodity markets, oil prices bounced after suffering their largest one-day drop since April 2020 on Friday.

“The move all but guarantees the OPEC+ alliance will suspend its scheduled increase for January at its meeting on 2 December,” wrote analyst at ANZ in a note.

“Such headwinds are the reason it’s been only gradually raising output in recent months, despite demand rebounding strongly.”

Brent rebounded 3.9% to $75.57 a barrel, while U.S. crude rose 4.5% to $71.24.

Gold has so far found little in the way of safe haven demand, leaving it stuck at $1,791 an ounce.

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(Reporting by Wayne Cole; Editing by Richard Pullin & Shri Navaratnam)

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Nissan Motor to spend $17.6 billion to accelerate electrification

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November 29, 2021

TOKYO (Reuters) – Nissan Motor Co said on Monday it will spend 2 trillion yen ($17.59 billion) over the next five years to accelerate vehicle electrification as it bets tighter carbon emission restrictions will spur demand for electric cars and hybrids.

Japan’s No. 3 car maker will introduce 23 electrified vehicles by 2030, including 15 electric vehicles (EV), and plans to introduce all solid-state batteries by March 2029, it said in a statement.

Nissan’s deeper push into battery-powered cars comes as consumer demand for such vehicles grows in key auto markets such as China and the United States and as its competitors release new electric vehicles.

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Although still only a small portion of vehicles on the road, global electric car registrations in 2020 grew 41% even as the overall car market contracted by almost a sixth, according to the International Energy Agency (IEA).

Nissan, like other Japanese car makers, however, has yet to commit to completely abandoning fossil-fuel vehicles.

At the U.N. climate summit in Glasgow this month, major car makers, including General Motors and Ford Motor Co, signed on to a declaration that committed them to phase out fossil fuel vehicles by 2040.

($1 = 113.7000 yen)

(Reporting by Tim Kelly; Editing by Christopher Cushing and Muralikumar Anantharaman)

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Shares of Macau casino operator Suncity suspended -HKEX

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November 29, 2021

HONG KONG (Reuters) – Shares of Suncity Group Holdings Ltd were suspended on Monday after its chief executive was believed to be among 11 people arrested by Macau authorities on Sunday over alleged links to cross-border gambling and money laundering.

The South China Morning Post reported that Macau police said on Sunday a 47-year-old businessman surnamed Chau was among those arrested. Alvin Chau is head of Suncity.

Suncity could not be reached for comment. Shares of the company last closed at HK$0.255.

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(Reporting By Anne Marie Roantree; Editing by Kim Coghill)

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