Lower oil prices send Saudi oil giant Aramco's first quarter profit down 19%

Lower oil prices send Saudi oil giant Aramco's first quarter profit down 19%

Saudi oil giant Aramco's first quarter net profit dropped 19% from a year earlier to 119.54 billion riyals (USD31.88 billion), said the company.

Profit still beat analysts' median forecast of USD30.8 billion, according to Refinitiv data, and Aramco said the decline was partially offset by lower taxes including in the zakat Islamic tax and a rise in finance and other income. Net profit was 3.75% higher than in the fourth quarter.

Yousef Husseini, head of materials at EFG Hermes Research, said there was no material surprise in Aramco's results, "with the company performing in line with its ability at prevailing oil prices and taking into account production cuts."

"But, the real positive surprise, which we think will be well received by the market, is that Aramco finally decided to up its dividend policy and include a clear link to its performance."

The world's top oil exporter made a record profit of over USD161 billion for 2022 on higher energy prices and production.

Last month, Saudi Arabia and other OPEC+ producers announced surprise oil production cuts from May, initially driving up prices, but global economic uncertainty and an unclear demand outlook continue to weigh on prices.

We remind, Saudi Aramco has signed 59 corporate procurement agreements (CPAs) worth a potential total of USD11 billion with up to 51 domestic and international manufacturers, as a part of its coveted in-kingdom total value add (IKTVA) localisation programme.

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BASF reports Q1 sales decrease

BASF reports Q1 sales decrease

BASF had a 13.4% decrease in sales for Q1 2023, from EUR23.1 billion in Q1 2022 to EUR20.0 billion, said the company.

According to the company, this was primarily the result of “lower volumes in almost all segments due to weaker demand”.

However, net income was EUR1.6 billion, EUR340 million higher than in the same period of the previous year.

“BASF started off 2023 better than analysts had expected – and in a stagnating and difficult economic environment,” said D. Martin Brudermuller, chairman.

The company forecasts sales of between EUR84 billion and EUR87 billion for 2023.

We remind, BASF announced that it has received the International Sustainability and Carbon Certification (ISCC) PLUS for certain grades of plastic additives produced at its manufacturing sites in Kaisten, Switzerland and McIntosh, Alabama, United States.

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Evonik launches additives for increasing quality of recycled plastics

Evonik launches additives for increasing quality of recycled plastics

Evonik introduces a diverse range of additives under the brand name TEGO Cycle to help its customers improve the process and increase the final quality of recycled plastics, said the company.

Designed to save energy during the mechanical recycling process, the TEGO Cycle portfolio of additives also enhances the quality of polymers, enabling the transition of the plastics value chain into a 'value cycle.'

Evonik will showcase its entire additives portfolio for improving the mechanical recycling process and final quality of plastics at booth A12 in Amsterdam during the Plastics Recycling Show Europe on 10-11 May 2023. In addition to the latest TEGO Cycle products, Evonik will launch its new organo-modified siloxane-based TEGOMER Polymer Processing Aids (PPA) for converters looking to replace standard PPAs made from fluoroelastomers in PE and PP processing.

We remind, Linde has signed a long-term agreement to supply green hydrogen to Evonik. Linde will build, own and operate a nine-megawatt alkaline electrolyzer plant on Jurong Island, Singapore. The plant will produce green hydrogen, which Evonik will use to manufacture methionine, an essential component in animal feed. The new supply agreement supports the planned expansion of Evonik’s existing facility and will help Evonik limit its greenhouse gas emissions in Singapore.

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Arkema gets validation from SBTi for new 2030 GHG emissions reduction targets

Arkema gets validation from SBTi for new 2030 GHG emissions reduction targets

Arkema sets a new climate plan with more ambitious targets by 2030 across its whole value chain, approved by the organization Science Based Targets initiative (SBTi), said the company.

The Group now aims to reduce its greenhouse gas emissions by 48.5% for Scopes 1+2 and by 54% for Scope 3 by 2030 versus 2019.

In July 2022, the Group had set new greenhouse gas reduction targets, in line with the expectations of the Paris Agreement, which aims to limit global warming to 1.5°C above pre-industrial levels by the end of the century.

Thanks to significant progress made in 2022, these targets have been raised, and Arkema now aims for a 48.5% reduction in the Group's greenhouse gas emissions for Scopes 1+2, and a 54% reduction for Scope 3 by 2030 relative to 2019. These new targets have been approved by the independent global organization Science Based Targets initiative (SBTi).

“Arkema has made long-standing commitments in the fight against climate change,” said Thierry Le Henaff, Chairman and CEO. “From its energy procurement policy to industrial innovation, from its portfolio of solutions to the dissemination of a ‘climate and environment culture’, this virtuous trajectory mobilizes all of the Group's components, and we are particularly proud that our new 2030 targets have been validated by the SBTi,” added Le Henaff.

Already committed for many years to the pursuit of energy efficiency at its industrial sites through its Arkema Energy program, and to the development of low-carbon energy procurement, the Group has identified room for improvement in its Scopes 1+2, and so plans to reduce its emissions from 3.7 million tons of CO2 equivalent in 2019 to 1.9 million tons in 2030.

We remind, Arkema announces the doubling of its polyester resins capacity in its Navi Mumbai facility in India, reinforcing the Group’s leadership position in the global powder coatings market and its commitment to developing very low-VOC technologies. Arkema invested in the Navi Mumbai facility in early 2019 to expand geographic coverage of its high performance, more sustainable, low-VOC products, and to support its customers in their development. The site includes a modern manufacturing unit and a dedicated laboratory to provide application development and technical support in the region.

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Shell trades its way to Q1 profit beat

Shell trades its way to Q1 profit beat

Shell's Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas, and operates the infrastructure necessary to deliver them to the market, said the company.

Segment earnings, compared with 4Q 2022, mainly reflected lower prices (decrease of $188 M), timing of liftings (decrease of USD305 M), and favourable tax movements in 4Q 2022 (decrease of $543 M), partly offset by lower operating expenses (decrease of USD286 M), lower exploration expenses and well writeoffs (decrease of $148 M) and lower depreciation (decrease of USD105 M).

1Q 2023 segment earnings also included charges of USD111 M relating to impairments, and deferred tax charges of USD132 M due to amendments to IAS 12, partly offset by gains of USD73 M due to the fair value accounting of commodity derivatives, gains of USD70 M from disposal of assets, and gains of USD48 M related to the impact of the strengthening Brazilian real on a deferred tax position.

These gains and losses are part of identified items, and compare with 4Q 2022 which included charges of $1385 M relating to the EU solidarity contribution and USD441 M relating to the UK energy profits levy, partly offset by favourable movements of USD304 M due to the fair value accounting of commodity derivatives.

Adjusted earnings and adjusted EBITDA were driven by the same factors as the segment earnings and adjusted for identified items. Cash flow from operating activities for the quarter was primarily driven by adjusted EBITDA, partly offset by tax payments of USD2019 M, the timing impact of dividends from joint ventures and associates of $514 M, and working capital outflows of USD475 M.

Total production, compared with 4Q 2022, increased mainly due to lower scheduled maintenance and lower unscheduled deferment, partly offset by divestments. Segment earnings stood at USD2779 M, USD1380 M, and USD3095 M for 1Q 2023, 4Q 2022, and 1Q 2022, respectively, a change of +101%.

Adjusted earnings stood at USD2801 M, USD3061 M, and USD3450 M for 1Q 2023, 4Q 2022, and 1Q 2022, respectively, a change of -9%. Adjusted EBITDA stood at USD8837 M, USD9418 M, and USD8977 M for 1Q 2023, 4Q 2022, and 1Q 2022, respectively, a change of -6%.

We remind, Shell has awarded the Serikandi Kent Energy Solutions joint venture a five-year commissioning and start-up services contract for its activities in Brunei Darussalam. Details and the value of this long-term contract – the first win for Serikandi Kent Energy Solutions - were kept under wraps although Joe McCormick, Kent’s executive vice president for Asia Pacific, said the JV would be building up its local resources in tandem with the BSP work.

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