Wealth Advisor Rockville, MD

The Saudi Arabian Oil Company, known as Saudi Aramco, has officially surpassed Apple as the most profitable company in the world, revealing it made a massive $111 billion in 2018, according to a statement from the credit rating agency Moody’s Corporation. By comparison, Apple made $59.53 billion in fiscal 2018. This is the first time the state-run oil company has released its finances.

Meanwhile, ExxonMobil, the largest US oil company, made $20.8 billion, while Royal Dutch Shell, the largest publicly traded oil company, made $23.4 billion in 2018, reports CNN.

Saudi Aramco, a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia, made its financial information public in a prospectus for a $10 billion bond sale. The company plans to use the bond sale to finance a nearly $70 billion stake in Saudi Arabia’s petrochemicals company. This is Aramco’s first public earnings declaration since the Saudi government took control of ownership in 1988.

However, Moody’s did not give the company, which operates the world’s largest single hydrocarbon network called the Master Gas System, its top credit rating as its heavy dependence on the country’s economy could become a headwind for the company. Therefore, Moody’s issued an A1 rating for Aramco. Meanwhile Chevron and Exxon Mobil have higher ratings of Aa2 and Aaa.

Rehan Akbar, senior credit officer at Moody’s, said in a statement, “Saudi Aramco has a proven track record of implementing large scale projects and has over the past decade significantly increased hydrocarbon production and refining capacity.”

The statement continued, “At the same time, credit linkages to the government of Saudi Arabia (A1 stable; A1 foreign currency ceiling) are significant, and result in our decision to constrain Aramco’s rating to that of the government.”

Akbar added, “Aramco is wholly-owned by the state and is expected to remain largely under government ownership even after any potential IPO in the future. While there is a clear track record of Aramco having been run as a commercially independent company, the government’s budget is highly reliant upon contributions from Aramco in the form of royalties, taxes and dividends.”

In 2018, Aramco had planned to go public last year and as such would have put up 5% of the company for sale in what would have been the largest initial public offering ever. But the offering never happened.

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