Saudi Aramco sees Q3 profits drop 15%

(Sharecast News) - State-owned oil major Saudi Aramco saw profits drop 15% in the third quarter as lower refining margins and crude prices weighed on the bottom line. The group, formerly known as Saudi Arabian Oil Company, reported a net income of $27.6bn for the three months to 30 September, down from $32.6bn a year earlier but slightly ahead of the consensus forecast of $26.9bn.

Earnings before interest, tax and zakat (an Islamic finance obligation for charitable causes) were 18% lower at $52.0bn.

The upstream division saw operating profits fall 13% to $52.8bn, due to lower oil prices and reduced volumes sold, partially offset by a decrease in production royalties.

Meanwhile, the downstream unit fell to an operating loss of $1.8bn, compared with a profit of $5.3bn previously, due to weaker refining margins.

Nevertheless, cash flow from operating activities increased to $35.2bn, from $31.4bn a year earlier, helping free cash flow to rise to $22.0bn from $20.3bn.

"Aramco delivered robust net income and generated strong free cash flow during the third quarter, despite a lower oil price environment," said president and chief executive Amin Nasser.

"As we focus on strategic growth opportunities and capturing value through integration and diversification, we intend to maintain our positive momentum and cement our position as a leading global energy and petrochemicals player."