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.

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Agencies
July 23,2020

Abu Dhabi, Jul 23: Muslims in the United Arab Emirates have been asked to perform Eid Al-Adha prayers at home even as mosques will be allowed to operate at an increased capacity of 50 percent from Aug. 3.

Mosques in the UAE have been operating at 30 percent capacity after they reopened on July 1.

Announcing the move, Dr. Saif Al Dhaheri, the official spokesman for the National Emergency, Crisis and Disasters Management Authority, stated that after assessing the situation and coordinating with the concerned authorities, it was decided that Eid Al-Adha prayers would be conducted in homes and takbeers broadcast through visual and audio means.

He also announced that the Emirates Fatwa Council has recommended that donations and sacrifices should be to official charitable causes in the country only.

Al Dhaheri advised the public to donate during this time to the official charitable bodies in the country with sacrifices and donations, through smart applications concerned with sacrifices or through slaughterhouses outlined by the local authorities that guarantee the application of precautionary and preventive measures and provide remote services without the need to enter livestock markets or slaughterhouses.

Al Dhaheri stressed the need to avoid family visits and gatherings, and replace them using electronic means of communication or phone contact, as well as refraining from distributing Eid gifts and money to children and individuals during this occasion recommending to instead use of electronic alternatives.

Al Dhaheri pointed out that it is necessary to avoid visiting pregnant women, children and those with chronic diseases who are most vulnerable to COVID-19 and not to allow them to leave the home and avoid going out to public places to preserve their health and safety.

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News Network
June 18,2020

New Delhi, Jun 18: Prime Minister Narendra Modi on Thursday said he is "deeply grateful" for the overwhelming support shown by the global community for India''s membership of the UN Security Council.

India will work with all member countries to promote global peace, security, resilience and equity, he said.

India garnered 184 votes out of the 192 ballots cast in the General Assembly to win the election for the non-permanent seat in the powerful Security Council.

India''s two year term will begin on January 1, 2021.

This is the eighth time that India will sit at the UN high-table, which comprises five permanent members and 10 non-permanent members.

"Deeply grateful for the overwhelming support shown by the global community for India''s membership of the UN Security Council," the prime minister wrote on Twitter.

India will work with all member countries to promote global peace, security, resilience and equity, he said.

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Agencies
May 10,2020

Paris, May 10: The number of coronavirus cases worldwide topped four million as some of the hardest-hit countries readied Sunday to lift lockdown restrictions despite concern about a second wave of infections.

Governments around the world are trying to stop the spread of the deadly disease while scrambling for ways to relieve pressure on their economies, which are facing a historic downturn with millions pushed into unemployment.

Despite the intense political pressure to reopen, nations are also keen to avoid second waves of infections that could overwhelm healthcare systems, with reminders over the weekend of the threat posed by the virus.

In the United States, media reported Saturday that the nation's top infectious disease expert, Anthony Fauci, was among three members of the White House coronavirus task force who will self-isolate after potential exposure.

And in South Korea, the capital Seoul shut all bars and clubs on Saturday as more than 50 cases were linked to a man who tested positive after spending time in one of the city's busiest nightlife districts.

Despite the risks, some governments in hard-hit Europe have said are signs of progress that justify cautious steps towards normality.

Officials in France on Saturday said the day's death toll of 80 was the lowest since early April, while nursing home fatalities also fell sharply as the nation prepared to relax curbs on public movement imposed eight weeks ago.

The easing, to begin Monday, has brought mixed reactions.

"I've been scared to death" about the reopening, said Maya Flandin, a bookshop manager from Lyon. "It's a big responsibility to have to protect my staff and my customers."

French health officials have warned that social distancing must be kept up even as restrictions are eased.

In Spain, about half the population will be allowed out on Monday for limited socialisation, and restaurants will be able to offer some outdoor service as the country begins a phased transition set to last through June.

With lingering fears of a resurgence, authorities excluded Madrid and Barcelona -- two COVID-19 hotspots -- from the first phase.

Belgium is also easing some restrictions on Monday, and in some parts of Germany, bars and restaurants reopened on Saturday with further easing set for Monday.

In Britain, Prime Minister Boris Johnson is expected Sunday to lay out a plan for the nation to emerge out of its current lockdown.

Media reports have suggested that Britain may introduce a mandatory 14-day quarantine for international arrivals to stop the spread of the virus.

Global economic figures are pointing to the most acute downturn in nearly a century, with businesses forced to shut and supply lines badly disrupted, and pressure is growing on leaders around the world to find a way out as the worldwide death toll topped 277,000 and infections crossed four million.

In the United States, the country with the highest death toll and where more than 20 million people have lost their jobs, President Donald Trump has insisted that next year would be "phenomenal" for the economy, urging reopening despite the virus still claiming well over 1,000 lives daily in the country.

The scale of the challenge was brought in sharp focus over the weekend as US media reported that top disease expert Anthony Fauci, who has become the trusted face of the government response to the pandemic, is going to self-isolate after possible exposure to an infected White House staffer.

Fauci told CNN that he will undergo a "modified quarantine" as he had not been in close proximity to the staffer, the network reported. He will remain at home teleworking, and will wear a mask for two weeks.

Robert Redfield, the director of the Centers for Disease Control and Prevention, and Stephen Hahn, the commissioner of the Food and Drug Administration, will also self-isolate, CNN added.

All three will still testify at Tuesday's Senate coronavirus hearing, with Redfield and Hahn participating via video link, according to Senator Lamar Alexander, chairman of the chamber's health committee.

It is believed Fauci will attend wearing a mask, CNN reported.

President Trump has faced sharp criticism from his predecessor Barack Obama, who said on a leaked tape that Trump's handling of the crisis was an "absolute chaotic disaster".

With people wearying of being indoors and under economic pressure, anti-lockdown protests have been held in a number of countries in recent weeks, with some demonstrators arguing that such restrictions violate their rights and others promoting conspiracy theories about the pandemic.

Ten people were arrested and a police officer injured in Melbourne, Australia, on Sunday in the latest such protest, where around 150 people gathered to demand an end to the shutdown.

Participants were promoting a number of conspiracy theories, such as linking 5G cellular communications to the disease.

Australian chief medical officer Brendan Murphy said there was "a lot of very silly misinformation out there", including the 5G allegation.

"I have unfortunately received a lot of communication from these conspiracy theorists myself," he said.

"It is complete nonsense. 5G has got nothing at all to do with coronavirus."

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