Aramco IPO on track for 2020-21, says Saudi crown prince

The world’s largest oil exporting company will hold its first earnings call in August

FILE - In this Tuesday, Oct. 23, 2018 file photo, Saudi Crown Prince Mohammed bin Salman smiles as he attends the Future Investment Initiative conference, in Riyadh, Saudi Arabia. Whether pressured to speak up after receiving assistance or making a diplomatic play for more, some African countries are expressing support for Saudi Arabia as shocking details in the killing of Jamal Khashoggi approached a crescendo, with South Sudan issuing a rare statement praising the Saudi position to defuse the crisis as "honorable". (AP Photo/Amr Nabil, File)
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Saudi Arabia is committed to listing its state oil producer Saudi Aramco between 2020 and 2021, depending on market conditions, according to Crown Prince Mohammed bin Salman.

"We are committed to the Aramco IPO, given favourable conditions and the right time, and as I said before we expect that between 2020 and 2021," he told Arabic daily Asharq Al Awsat.

Aramco, the world’s largest oil exporting company, sells crude on behalf of the kingdom.

The producer emerged as the most profitable company in 2018, beating the likes of tech giants Apple and Google. Aramco made $111.1 billion (Dh408bn) in net income and had earnings before interest, tax, depreciation amortisation of $224bn last year.

The 5 per cent listing of Aramco is critical to Prince Salman’s Vision 2030. An initial public offering is expected to fetch as much as $100bn in proceeds for Saudi Arabia based on the government's $2 trillion valuation of Aramco.

However, the merger of Aramco with Saudi Basic Industries Corporation, the region’s largest-listed chemicals company, delayed the IPO. The oil giant acquired a 70 per cent stake in Sabic in a $69.1bn deal in March.

Aramco then issued a $12bn bond, appetite for which topped $100bn in April. Demand for the issue was the largest for emerging markets since an order book value of more than $52bn for Qatar's $12bn bonds last year, and surpassed $67bn in demand for Saudi Arabia's inaugural bonds in 2016.

Aramco received the fifth-highest ratings from Fitch Ratings and Moody's Investors Service ahead of the issuance.

Moody's assigned Aramco an A1 credit rating while Fitch gave it A-plus.

Aramco will hold its first earnings call in August to discuss its half-year performance.

The state producer shared its annual results last week in a new investor relations section on the company website, ahead of its biannual presentation scheduled for August.

The Crown Prince in his interview also noted that the country’s Vision 2030 had now moved onto implementation stage, bearing tangible results for the Saudi economy.

“What is happening in the kingdom is not only a set of financial and economic reforms to achieve specific figures, but is a comprehensive structural change of macroeconomic goals to make a shift in economic performance and development in the medium and long term,” he told the paper.

Vision 2030, which seeks to lower Saudi dependence on crude and forge new industry clusters and economic models, could see some of its sub-programmes subject to change without diluting the overall strategy, he said.

“Like any strategic plans, [Vision 2030] must be subject to updates and modifications according to circumstances and actualities that become evident upon application, without shaking the vision’s pillars and objectives,” said Prince Salman.

Vision 2030, a brainchild of the Crown Prince, was first announced in 2016. Among its large-scale schemes include the development of the mega-city Neom, spanning parts of Saudi Arabia, Egypt and Jordan as well as economic clusters that combine key sectors such as logistics, mining and energy.