Saudi Aramco eclipses Apple as world’s top-earning company

Agencies
April 2, 2019

Dubai, Apr 2: Saudi Aramco, the world’s biggest oil producer, made core earnings of $224 billion last year, almost three times as much as Apple, figures from the state-owned company showed on Monday ahead of its debut international bond issue.

Aramco revealed its financials in order to obtain a public rating and start issuing public international bonds.

Despite the huge profit, the state-owned oil giant was rated by credit agencies at par with Saudi Arabia, meaning the Kingdom’s economy will weigh on Aramco’s cost of borrowing as it prepares its bond market debut.

Saudi energy minister Khalid Al-Falih said earlier this year the planned bond sale would raise around $10 billion, but banking sources said the transaction could be larger.

Rating agencies Fitch and Moody’s rated Aramco A+ and A1 respectively, but both said that without sovereign rating constraints Aramco would be in the same league as better-rated international oil companies like Exxon Mobil, Chevron and Shell.

Fitch put Aramco’s standalone credit profile at “AA+.”

Credit ratings allow investors to compare and assess the credit quality of bond issuers and their debt securities, and are important in determining how much borrowers have to pay.

The planned bond deal is Aramco’s inaugural transaction in international markets. It still plans to launch an initial public stock offering or IPO in 2021, expected to generate $100 billion, having postponed its flotation from 2018.

“Saudi Aramco has many characteristics of a Aaa-rated corporate, with minimal debt relative to cash flows, large scale of production, market leadership and access in Saudi Arabia to one of the world’s largest hydrocarbon reserves,” said Rehan Akbar, senior credit officer at Moody’s.

The group has 257 billion barrels of oil equivalent, representing over 50 years of reserves based on current production levels, according to a company presentation given to investors and seen by Reuters.

Aramco will start meeting international bond investors this week for the much anticipated debt transaction, expected to attract hefty demand from global investors.

The planned bond sale follows the announced acquisition of a 70 percent stake in Saudi Basic Industries Corp. (SABIC), the world’s fourth-largest petrochemicals maker, from Saudi Arabia’s Public Investment Fund (PIF), in a deal worth $69.1 billion.

The bond sale, which may be split into tranches with maturities ranging from three to 30 years, is not linked to the SABIC acquisition, Aramco said.

Aramco intends to pay for the acquisition in tranches, with 50 percent at the closing of the transaction and the remainder over a two-year period, from internal cash generation and, potentially, other resources, the company said in its presentation.

Aramco had earnings before interest, tax and depreciation (EBITDA) of $224 billion in 2018. By contrast Apple, which according to Forbes was the world’s top company in terms of profits last year, had normalized core earnings, or EBITDA, of $81.8 billion.

Moody's Investors Service said Aramco posted a net profit of $111.1 billion in 2018 — far higher than the combined net earnings of the five international oil majors — and generated $359.9 billion in revenues. Last year, Apple posted nearly $50 billion in net profits.

“Saudi Aramco has an extremely strong liquidity position,” Moody’s said, with $48.8 billion in cash against $27 billion in reported debt.

“The company’s balance sheet leverage has been conservatively managed,” said the agency, adding it has $46.8 billion of bank facilities, of which about $25.5 billion was still available.

Aramco representatives will meet with investors in Asia, Europe and the US through Friday, April 5, according to a document issued by one of the banks leading the deal.

The roadshow has no planned stop in the Middle East, showing the transaction is mostly aimed at international buyers.

“The blue-chip company is extremely profitable, free cash flow positive, has low leverage and strong reserves for the future, making it a compelling investment case for global investors,” said Parth Kikani, fixed income director at Emirates NBD Asset Management.

Aramco is presenting itself to global investors as an “anchor of global energy” and a global energy provider of systemic importance, producing one of every eight barrels of global crude, according to the investor presentation.

It had $86 billion in free cash flow at the end of 2018.

The SABIC acquisition, at the heart of Aramco’s push to expand in the downstream business, will not impact Aramco’s rating, the company said in the presentation.

Aramco has hired Lazard as financial adviser for the planned bond deal, and JP Morgan and Morgan Stanley as global coordinators. They are joined by Citigroup, Goldman Sachs, HSBC and NCB Capital as bookrunners.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
April 20,2020

Sharjah, Apr 20: Air Arabia announced on Monday it will operate new repatriation flights from four cities in India to Sharjah carrying UAE nationals back home.

The special flights will operate from Mumbai and Delhi to Sharjah International Airport on April 20 while special flights will operate from Kochi and Hyderabad to Sharjah International Airport on April 22.

Air Arabia remains committed to bring stranded citizens back home as well as supporting requests to operate repatriation flights and is working closely with UAE authorities in this regard, the airline said.

Air Arabia announced earlier that it’s operating a mix of repatriation flights as well as cargo flights during the month of April to multiple destinations.

Further information about the repatriation and cargo flights is available on the website or can be obtained by contacting the Air Arabia call centre on 06 5580000 or respective travel agent.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
February 6,2020

Feb 6: India has been ranked 40th out of 53 countries on a global intellectual property index, even as the country has shown improvement in terms of scores when it comes to the protection of IP and copyright issues, a top American industry body said on Wednesday.

India was placed at 36th position among 50 countries in 2019.

India's score, however, increased from 36.04 per cent (16.22 out of 45) in 2019 to 38.46 per cent (19.23 out of 50) in 2020, a 2.42 per cent jump in an absolute score.

However, India's relative score increased by 6.71 per cent, according to the International IP Index released by Global Innovation Policy Center or GIPC of the US Chambers of Commerce.

This year, it finds itself on the 40th place among 53 countries. Two new Index economies (Greece and the Dominican Republic) scored ahead of India. The Philippines, and Ukraine leapfrogged India.

"Since the release of the 2016 National IPR Policy, the government of India has made a focused effort to support investments in innovation and creativity through increasingly robust IP protection and enforcement," the GIPC said.

Since 2016, India has improved the speed of processing for patent and trademark applications, increased awareness of IP rights among Indian innovators and creators, and facilitated the registration and enforcement of those rights, it added.

According to the eighth edition of the annual report, India's score on the Chamber's International IP Index demonstrates the country's growing investment in IP-driven innovation and creativity. The Index specifically highlights a number of reforms over the last year that strengthen India's overall IP ecosystem, it said.

"In 2019, the Delhi High Court used dynamic injunctions to disable access to copyright-infringing content online, resulting in an increase in India's score on two of the copyright-related indicators," it said.

"The use of these injunctions places India alongside global leaders in copyright enforcement, including Singapore and the UK. As a result, India scores ahead of 24 other economies in the copyright indicators," the report said.

The Delhi High Court also issued a series of judgements that provide clarity on existing statutes related to trademark protection online, resulting in a score increase on one of the trademark-related indicators, it added.

The courts issued two precedential rulings that raised the bar for the damages awarded in IP-infringement cases and may provide a deterrent for future infringement. This resulted in an increase in score on one of the trademark-related indicators, it said.

Global Innovation Policy Center or GIPC said India also continues to score well in the Systemic Efficiency indicator, scoring ahead of 28 other economies in these indicators.

"This is a result of a concerted effort by the Indian government to consult with stakeholders during IP policy formation and create greater awareness about the importance of IP protection,” it said adding that India also remains a leader in the use of targeted incentives and IP assets for small and medium-sized enterprises (SMEs).

“To continue this upward trajectory, much work remains to be done to introduce transformative changes to India’s overall IP framework and take serious steps to consistently implement strong IP standards," the report said.

GIPC has identified several challenges for India. Prominent among them being patentability requirements, patent enforcement, compulsory licensing, patent opposition, regulatory data protection, transparency in reporting seizures by customs, and Singapore Treaty of Law of TMs and Patent Law Treaty.

"We are encouraged that Indian policymakers seem to recognize this Index as a valuable resource in their efforts to strengthen the country’s promising innovation ecosystem and enhance its competitiveness in an increasingly knowledge-based global economy,” the report said.

Observing that no other economy stands to gain more from strong Indian IP than India itself, the report said for example, no industry has been hurt more by copyright violations in India than the country’s own Bollywood industry, which loses almost USD3 billion to piracy each year.

"The number one way the Modi administration can demonstrate its commitment to the success of the Atal Innovation Mission, Accelerating Growth for New India’s Innovations, Make in India, Digital India, and Startup India is to strengthen its IP framework in ways that promote the legal and regulatory certainty necessary for greater R&D investment, high-value jobs, and greater innovative and creative outputs,” it said.

"Strong IP standards can further solidify India's position as the world’s fastest-growing economy, bolstering its reputation as a destination for doing business, foreign businesses’ ability to invest and make in India, thereby supporting the growth of India’s own innovative and creative industries," the report said.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
Agencies
March 13,2020

Amid the rapid spread of the novel coronavirus (COVID-19), which has infected 73 people in India and killed more than 4,500 individuals globally, doctors have advised that in addition to regularly washing hands, one should also disinfect their smartphone every 90 minutes with alcohol-based hand sanitizer.

Ravi Shekhar Jha, Head of Department at Fortis Escorts Hospital in Faridabad said the best method to disinfect your smartphone is to use regular doctor spirit or the alcohol-based hand sanitizer at least every 90 minutes.

"Avoid touching your eyes, mouth, or nose. The best option is to use a phone cover or a Bluetooth device and try to touch your phone as less as possible. We would also recommend cleaning your phone at least twice a day," Jha told IANS.

According to research, published in 2018 by Insurance2Go, a gadget insurance provider, revealed that smartphone screens have three times more germs than a toilet seat.

One in 20 smartphone users was found to clean their phones less than every six months, said the study.

"In the time of fear of coronavirus, smartphones should also be disinfected with alcohol-based sanitizer rub. Pour few drops of sanitizer on a tiny clean cotton pad and rub it safely on your entire phone," said Jyoti Mutta, Senior Consultant, Microbiology, Sri Balaji Action Medical Institute in New Delhi.

"You can repeat this process every evening coming back home after an entire day out at work and once in the morning before going out," Mutta added.

"Maintain basic cleanliness, and try to avoid using other's phones especially if suffering from respiratory illness or flu-like symptoms as there is no other way to disinfect these regular gadgets," she stressed.

Another study from the University of Surrey in the UK, also found that the home button on your smartphone may be harbouring millions of bacteria - some even harmful.

The World Health Organisation (WHO) declared the novel coronavirus as a global pandemic on Wednesday. The death toll of COVID-19 has crossed the 4,500 marks and confirmed cases globally have touched one lakh as per the reports.

According to Suranjeet Chatterjee, Senior Consultant in Internal Medicine Department of Indraprastha Apollo Hospitals in New Delhi, "We should frequently wash our hands, cover our coughs and it is important to adapt to other good hygiene habits that are most important in such a situation."

"Coronavirus and other germs can live on surfaces like glass, metal or plastics and phones are bacteria-ridden. It is necessary that we sanitize our hands frequently and make sure that our hands are clean all the time," Chatterjee told IANS.

"The emphasis should be laid on sanitising our hands rather than sanitizing the phone - once in a while the phone can be sanitized under the guidance of the makers of the phone," Chatterjee stressed.

According to the global health agency, the most effective way to protect yourself against coronavirus is by frequently cleaning of your hands with alcohol-based hand rub or washing them with soap and water.

The WHO's report showed the virus infects people of all ages, among which older people and those with underlying medical conditions are at a higher risk of getting infected.

People should eat only well-cooked food, avoid spitting in public, and avoid close contact, the WHO said, adding that it is important for people to seek medical care at the earliest if they become sick.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.