Saudi Aramco is the most profitable company in the world

By Rhod Mackenzie

The common assumption that technology firms generate the highest revenue is erroneous. As per Fortune magazine, in 2023, the most lucrative corporation globally is neither Apple Inc nor Google. Instead, it is the oil conglomerate Saudi Aramco, with 90% of its shares currently owned by the state.

The previous year saw Aramco record a net income of $161.1 billion, constituting a monumental profit for a publicly traded entity. This immense profit is primarily generated from the sale of oil and petroleum products, amounting to £428 billion - a substantial increase from the previous year's sum of £293 billion. In 2022, Saudi Aramco's revenue reached £440.5 billion and its market capitalisation hit £1.6 trillion. As of 2019, the company publicly trades only 1% of its shares on the stock exchange.
In Q3 2023, Aramco pleased its shareholders and exhibited robust financial stability. As per the quarterly reports, the profit for July-September totalled £32.6bn, and the free cash flow was £20.3bn. The debt-to-capital ratio on 30th September of this year was 7.6%, signifying the company's healthy financial standing.

The impressive operational performance was partially due to its development and diversification strategy, which involved venturing into the liquefied natural gas market and intending to enter the South American market via local acquisitions.

In terms of financial indicators, the Saudi firm outranks technology heavyweights Apple and Google, despite the latter occupying high spots on the list of the most profitable firms. Thus, Apple recorded a net profit of £19.88 billion in April-June, representing a 2.26% increase from the second quarter of 2022. However, the company's net profit for the 12 months ending June 30, 2023, amounted to £94.76 billion, marking a 4.89% decline year-on-year. In 2022, Apple's net income was £99.8 billion, a 5.41% hike from 2021.

Meanwhile, Alphabet, Google's parent company, demonstrated impressive profitability, posting an Alphabet net profit of £19.689 billion in July-September. This represents a 41.55% increase from last year's Q3. Alphabet's net income for June 2022 to June 2023 was £48.638 billion, a 0.39% YoY decrease. For the entirety of 2022, Alphabet's net income was £43.554 billion, down 21.12% from 2021.