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Should we swallow our American pride, or is this par for the course in global business? 2. Is there something we can learn about global branding and/or corporate dominance?


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1. Should we swallow our American pride, or is this par for the course in global business?

2. Is there something we can learn about global branding and/or corporate dominance?


WSJ Analysis

WSJ Analysis




This criterion is linked to a Learning OutcomeQuality & Timeliness

Does the submission meet the assignment requirements?

5 to >4.5 pts

Exceeds Expectations

Around 400 quality words. Submitted on time or early.

4.5 to >3.0 pts

Meets expectations

Approximately 300 words. Submitted on time.

3 to >0 pts

Does not meet expectations

Significantly fewer than 300 words. Not submitted on time.

5 pts

This criterion is linked to a Learning OutcomeQuality & Relevance

How well does the submission address the questions?

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Exceeds Expectations

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Total Points: 10












Aramco Emerges Ahead of Apple as World’s Most Profitable Company

The firm generated net income of $111 billion last year; Apple’s equivalent profit was roughly $60 billion


Rory Jones



Summer Said


Updated April 1, 2019 12:15 pm ET


Gift unlocked article

Billion Dollar ProfitsSaudi Aramco’s net income last year dwarfed some of the biggest U.S. firms.Net incomeSources: company statements; Moody’s

Saudi AramcoAppleAlphabetExxon MobilRoyal Dutch ShellAmazon$0 billion$25$50$75$100Applex$59.53 billion

DUBAI—Saudi Arabia on Monday for the first time revealed details to investors that show its national oil company is the world’s most profitable business, demonstrating that the cloistered kingdom is willing to undergo unprecedented scrutiny to tap international cash.

With $111 billion in net income in 2018, Saudi Aramco, as the firm is known, had bigger returns last year than Apple Inc. and Exxon Mobil Corp. combined. Before taxes and other expenses, the firm said it made $212 billion, a figure similar to the combined military budgets of the 28 member states of the European Union.

The financial information on Monday was disclosed in a prospectus for a planned bond sale of at least $10 billion to help fund the acquisition of a $69.1 billion stake in Saudi Arabia’s national petrochemicals firm. The 470-page document provided the first look under the hood of Aramco’s finances since the once-American-run firm was nationalized over three decades ago and its profits became state secrets.

World’s Most Profitable Company Makes International Bond Debut

World’s Most Profitable Company Makes International Bond Debut

World’s Most Profitable Company Makes International Bond DebutPlay video: World’s Most Profitable Company Makes International Bond Debut

It is bigger and more profitable than Apple, Alphabet and Amazon combined. Aramco opens its books in the first step toward a potential public listing.

By disclosing Aramco’s profits and other detailed financial information, some Saudi officials hope they will quell any doubts about their determination to list Aramco publicly by 2021, in what would likely be the biggest ever IPO. Saudi Crown Prince Mohammed bin Salman, the kingdom’s day-to-day ruler, wants to use the IPO to raise tens of billions of dollars to build new futuristic new cities, diversify the kingdom’s oil-dependent economy and fund a host of non-oil industries like technology, entertainment and mining.

The 33-year-old prince first broached the IPO in early 2016, but concerns over disclosing Aramco’s finances helped delay it for years, to the point that many bankers and Saudi officials working on the plan believed it would never happen.

“These financials have not been open to the public. It is an important issue and this is probably a steppingstone to an IPO,” said Theodore Holland, a senior portfolio manager at Zurich-based Fisch Asset Management AG who aims to participate in the debt raising. He said there would be strong demand among investors for Aramco debt.

The financial figures—audited by PricewaterhouseCoopers Public Accountants—painted a picture of a company with unmatched financial heft.

The oil firm’s 2018 net income shot up from 284 billion Saudi riyals, or the equivalent of $75.9 billion, in 2017. By comparison, Apple’s equivalent most-recent full-year profit was roughly $60 billion; Amazon.com Inc. was $10 billion and Exxon Mobil Corp. was $21 billion.

Aramco’s massive earnings numbers come despite taxes of roughly 50% to the government, which is highly reliant on contributions from the oil firm. Aramco also pays a royalty to the Saudi government of 20% of revenues up to $70 a barrel of oil, and the rate increases on a sliding scale at prices above that level. Fitch Ratings estimates that from 2015 to 2017, Aramco accounted for around 70% of Saudi Arabia’s revenues.

But the three years of financial information contained in the prospectus illustrate how tightly Aramco’s profits are tied to oil prices.

Aramco reported a significantly lower net profit in 2016 of $13.2 billion, the prospectus said, when oil prices fell to an average monthly low of $31.90 a barrel in January that year. Its 2018 profits grew almost ninefold in a year when oil prices rose to over $80 a barrel.


  • Aramco Plans $10 Billion Bond, Casting Light on Its Finances for First Time (March 28, 2019)
  • Saudi Aramco to Buy Majority Stake in Petrochemicals Producer Sabic for $69.1 Billion (March 27, 2019)
  • Saudi Arabia’s Economic Overhaul Is Backfiring (March 23, 2019)
  • Saudi Arabia Approves Economic Reform Program (April 25, 2016)

Opening up Aramco’s books doesn’t necessarily mean the company will go ahead with an IPO.

Prince Mohammed previously announced he would list 5% of Aramco in 2018 at a valuation of roughly $2 trillion, though that process was delayed due to concerns that the company’s worth wasn’t close to the royal’s estimate.

The figures released Monday indicate a lower potential valuation for Aramco, up to about $1.5 trillion, assuming oil prices around $70 a barrel, according to Bernstein Research and Saudi officials familiar with internal calculations. Brent crude was above $68 a barrel on Monday.

Nevertheless, the disclosures to obtain a large foreign bond marked a coming-out party for Aramco.

Aramco has chosen banks including JPMorgan Chase & Co. and Morgan Stanley to manage its first debt offering and hold a roadshow beginning Monday in at least eight cities in the U.S., Europe and Asia. Investment bank Lazard is also an independent adviser on the bond sale.

A large white tank with a blue and white design

Description automatically generatedAn Aramco oil tank is seen at Saudi Aramco’s Shaybah oil field in Saudi Arabia. PHOTO: AHMED JADALLAH/REUTERS

The proceeds would be used for as a down payment on its $69.1 billion purchase of 70% of Saudi Basic Industries Corp., or Sabic with the remainder of the acquisition paid in installments over time, The Wall Street Journal has reported.

Aramco said Monday in the bond prospectus that it would pay 50% of the acquisition price at the closing of the deal sometime next year and the rest in installments up to 2021.

Aramco is buying the Sabic stake from Saudi Arabia’s sovereign-wealth fund, Public Investment Fund, which is expected to use the proceeds to drive Prince Mohammed’s agenda. The fund has already invested or committed nearly $100 billion to partnerships such as SoftBank Group Corp.’s Vision Fund and stakes in technology firms such as Uber Technologies Inc.

Ahead of the Aramco bond sale, agencies published ratings on the oil firm for the first time. Fitch rated Aramco at A+, the fifth-highest investment grade level and the same as Saudi Arabia’s sovereign bonds. The firm also said it assessed the company’s stand-alone credit profile, ignoring sovereign-related risks, at AA+, or three notches above the level at which the Saudi government itself can raise debt.

Moody’s likewise rated Aramco A1, a similar level to that given by Fitch, and noted that the oil firm’s ties to the government meant it couldn’t be assessed higher.

By comparison, Exxon is rated AAA by Moody’s, its highest level. Moody’s said Saudi Aramco’s bond rating was lower than Exxon’s and others because it “is constrained by the rating of the government of Saudi Arabia given the broad credit linkages between the two.”

Saudi Aramco is the world’s largest oil producer by volume, Fitch said. The oil firm’s 2018 total hydrocarbon production averaged 13.6 million barrels of oil equivalent a day, including natural gas output, ahead of global and regional producers such as Abu Dhabi National Oil Company, Royal Dutch Shell PLC, Total SA and BP PLC, the ratings agency said.

Saudi Aramco estimates its proved liquids reserves at 227 billion barrels and its total hydrocarbon reserves at 257 billion barrels of oil equivalent. Aramco’s net cash position at the end of last year was $48.8 billion and total borrowings were $27 billion, according to the bond prospectus. It made 69% of revenues last year from upstream oil and gas and the remainder from so-called downstream operations.



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