Bond Market News

Saudi Aramco reported a Q3 net income of $30.4bn, up 158% YoY and declared a dividend of $18.8bn to be paid in Q4. The sharp rise in net income was “primarily the result of higher crude oil prices and volumes sold and stronger refining and chemicals margins”. Bloomberg notes that the jump in profits has helped Aramco eclipse Apple to once again become the world’s most profitable firm. Aramco’s free cash flows were at $28.7bn compared to $12.4bn for the same period last year. Aramco’s gearing (Term of the Day, explained below) improved to 17.2% vs. 23% in December 2020 mainly due to higher cash and cash equivalents, driven by higher operating cash flows. Its capex was at $7.6bn in the third quarter, a 19% jump YoY and expects 2021 capex to be ~$35bn.

Aramco’s dollar bonds were slightly higher with its 4.25% 2039s up 0.4 points to 112.63, yielding 3.32%

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