The world’s most profitable company, from planet Earth, will make an IPO; Let’s discuss this company in today’s content. what is the name of the company most profitable in the world? The world’s most profitable company calls Saudi Aramco. I don’t know if that’s how you speak. She is one of the oil giants in the world. This company has absurd numbers. Just to give you an idea, her IPO size should be bigger than the GDP of our entire country. So, look at the dimension of this. In today’s content, I will pass you on various positive and negative information about the company and others even for you to know what we discuss about because most people have never heard of this company.
So, today, the company is responsible for 10% of world oil production and it is considered the most profitable company on the planet. The company’s EBITDA in 2018 was $ 224 billion, or I mean, I’m discussing a cash generation of more or less eight hundred ninety-eight billions of reais, Cousins. Per year, 898 billion reais per year in cash generation.
And this cash generation, look, it is enough to buy two Petrobras whole at the market value this past Monday here 4/11. Because, according to Economica, the Petrobras was valued at R $ 415 billion. Look how crazy! And besides, look, you who want to make money, the net profit of that company is estimated to be around 111 billion dollars, that is, a net profit which equates to the profit of Apple, Google and ExxonMobil combined. What ?!
The world’s most profitable company
That is, people are discussing here of a really big IPO, a really huge thing. Therefore, this IPO is valued at between 1.5 trillion dollars and 2 trillions of dollars. The government or kingdom of Arabia believes that this company is worth 2 trillion dollars. But, the companies that are participating in this possible IPO, they believe that this company would have more value, it would have more demand if it was valued at $ 1.5 trillion. And then, look, Brazil’s GDP in 2018, at the dollar rate of R $ 4.01. You are a guy who reads a lot and studies a lot, how much was Brazil’s GDP in 2018 that do you think there IS.
You’re smart, right? 1.69 trillion dollars. If the IPO or comes out at 1.7 tri, people you’re discussing a higher value than Brazil’s GDP. Look how crazy! Which is one of the biggest economies in the including the world, by the way. Main indicators of Saudi Aramco: operating cash flow $ 121 billion in 2018, net profit of $ 111 billion and the ROCE, which is the return on capital employed, 41.10%. Come on, the pros and cons I managed to find about the company:
First, the company plans to pay the equivalent of 75 billion euros dollars in dividends in 2020, which may even increase. If the IPO comes out to 2 trillion, for example, we’re discussing, then, a Yield 3.75% per year, which is a Yield lower than the Exxon, which has a Dividend Yield of 5.1% and Shell which has 6.6%. But, on the other hand, it is very similar to that of Petrobras which is 3.69%.
Second point, Saudi Aramco, as we already said, it is the most profitable company in the world, so it can make the shareholder capital very profitable and it is worth leaving of course if all these data are correct, we will not has a lot of information about the company, since it is opening the IPO now, there is no regulation ready and all that. It has the ROCE which is bigger than all the five biggest companies in the segment of it. So, it’s bigger than Shell, Exxon, Chevron, Total and bp. She has the lowest level of leverage also by the sector companies and it has the lowest Lifting Costs in the segment.
Lifting Costs is basically the cost of bringing the barrels of oil up here. Third point, the company is going to have a big decrease in the value that it pays to the government of Arabia because much of the profits of the company it was passed on to the government through taxes that it was 85%, then dropping to 50% and with the IPO this may fall to 20%, right? Less tax, more profit for the shareholder, right? Cons: she is a company completely linked to the Arabian government/kingdom. Arabic kingdom … In reality, only 3 to 5% of the total shares must be traded on the post-IPO market, right? That goes for the offer. So a lot of interference governmental, we know that historically it is not usually very cool as a profit in business, right? At least not for a company. Second, this company has much dependence on the government.
Yes, the same thing as the first but really this is so important that it is worth being mentioned twice. And the third thing, this offer will be restricted to some markets, that is, this will only happen on the Arabian stock exchange, at Tadawul. This is expected to happen on other exchanges as well. The kind of thing but, nothing confirmed yet.
In other words, a good company, gains a lot well, but a government that interferes a lot in the company, right? It always generates a little doubt. And, worth mentioning what ?! It is a very large company. Dude, think next, she’s almost 2 trillion-dollar company. 2 trillion dollars is saying that she is an entrepreneur 8 trillion reais. Dude, for a company of 8 trillion reais multiply by 10 is a lot of daring right? It is very daring for such a company to reach 80 trillion reais. So, really, it’s not a fast grower, right? A company that overnight: my God I won a lot of Market Share. Because, man, she already dominates a lot of thing, right? The bigger a company, it can be more efficient but, it has less Market Share to steal from other companies.