viernes, 20 de abril de 2018

La primera empresa en llegar al trillón de dólares será....


Fuente: Bloomberg



...SAUDI ARAMCO.

Investors still don’t know exactly when, or even whether, the share sale will take place, and until today they had no information on the company’s financial position. The sale, including an international listing in New York, London or Hong Kong, was initially scheduled for 2018, but is now likely delayed until 2019.

Net income
Saudi Arabian Oil Co. is fantastically profitable, with net income of about $34 billion in the first half of 2017, according to figures reviewed, more than four times what Exxon Mobil Corp. earned in that period. Implied costs of production, including overhead and depreciation, appear to be less than $10 a barrel. Given that Brent crude oil averaged only about $53 a barrel back then, and Aramco was only pumping about 9.9 million barrels of crude oil a day, the implication is this year's profits will be positively yuge.

Cash flow
While Aramco excels in net profit, it’s cash generation is less spectacular. According to Bloomberg calculations, cash flow was $52.1 billion in the first half of 2017 -- $30.7 billion of net cash from operations plus $21.4 billion that government owes to the company.

Debt and cash
Big Oil took on billions of dollars of debt during the oil price downturn of 2015 to 2016 to bridge a gap between cash flow, capital spending and dividends. When oil prices started to recover in 2017, Exxon, Shell, Chevron, Total and BP emerged from the storm with record net debt of nearly $150 billion combined. Aramco was the opposite, with net debt of just $1.3 billion -- total borrowings of $20.2 billion offset by cash and cash equivalents of $19 billion.

Dividend
The Saudi government owns 100 percent of Aramco, so it receives the company’s dividend. In the first half of 2017, it distributed $13 billion of cash. If you assume a dividend yield -- the annual payout divided by the market value of the company -- similar to Exxon of about 4 percent, then Aramco would need to pay annual dividends of $80 billion to justify a $2 trillion valuation the kingdom desires. To be sure, it’s unclear what proportion of the company’s annual dividend is the $13 billion paid in the first half.

Valuation
A month ago, I did a very rough calculation of what Aramco might be worth, using a smorgasbord of assumptions. At $80 a barrel, 11 million barrels of crude oil a day, $40 billion of annual capital expenditure, and a 7 percent free cash flow yield, I got a valuation of just under $1.5 trillion. That's a lot of money, albeit a bit below the $2 trillion Saudi officials appear to want.
The new data don't help on that front. Adjusting my assumptions based on these figures yields a new valuation of about $1.2 trillion.

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