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Aramco Completes Three Transactions with PKN ORLEN in Poland

A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. (Reuters)
A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. (Reuters)
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Aramco Completes Three Transactions with PKN ORLEN in Poland

A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. (Reuters)
A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. (Reuters)

Saudi Aramco, one of the world’s leading integrated energy and chemicals companies, successfully closed three landmark transactions with Polish refiner and fuel retailer PKN ORLEN, through its subsidiary Aramco Overseas Company BV, based in the Netherlands.

As part of the transaction, first announced in January 2022, the Company acquired equity stakes of 30% in a 210,000 barrels-per-day refinery in Gdansk; 100% in an associated wholesale business; and 50% in a plane fuel marketing joint venture with BP Europa SE, which operates in seven airports in Poland, following PKN ORLEN’s merger with Grupa LOTOS.

The agreements represent a significant milestone in Aramco’s long-term strategy to grow its integrated refining and petrochemicals capacity, and expand its product portfolio across the entire hydrocarbon value chain.

The transactions also seek to establish a solid foundation for further business development, and aim to complement Aramco’s strategy to expand its liquids to chemicals capacity to up to 4 million barrels per day.

Mohammed Y. Al Qahtani, Aramco Senior Vice President of Downstream, said: “These investments are part of our efforts towards cementing Aramco’s presence in a key European market, and provide a unique opportunity to develop new liquids to chemicals pathways, with hopes of expanding our global downstream footprint and supporting the diversification of our portfolio.”

“At the same time, we aspire to continue developing our product portfolio through our ongoing downstream transformation strategy,” he remarked.

Daniel Obajtek, President of the PKN ORLEN Management Board, said: “These transactions are of strategic importance in further strengthening energy supplies, not only in Poland but for the entire region.”

“We have built the largest company in Central Europe with a diversified portfolio of assets that will effectively strengthen current business lines and develop new ones. This creates new growth opportunities to allow us to continue to expand in prospective and high-margin products,” he added.

Aramco and PKN ORLEN have also entered into a crude oil sales agreement, pursuant to which Aramco will supply approximately 45% of PKN ORLEN’s crude oil requirements.

In addition to the investments, Aramco, SABIC and PKN ORLEN signed a joint development agreement to assess the technical and economic feasibility of a potential petrochemical project in the Polish city of Gdansk.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.