Saudi Aramco IPO Delayed, Wants To Reassure Investors With Earnings Update First

The Saudi Arabian Oil Company (Saudi Aramco) on Thursday announced a delay in the launch of its IPO to reassure investors the Iranian missile and drone attacks on two of its largest oil sites on Sept. 14 hasn't hurt its operating results.

No new date for the IPO has been set, according to sources familiar with the transaction cited by media. But a Reuters' source said the IPO will likely be postponed to 2020. On the other hand, the Financial Times wrote the listing will be delayed by “weeks." This might also well mean a delay until 2020. The Financial Times broke the story about the IPO postponement.

The world's most profitable company was expected to announce its plan to float a 1% to 2% stake on the Saudi Stock Exchange (or Tadawul) next week. A further 1% will be offered in 2020 as the first steps ahead in a sale that will see some 5% of the company sold to the public.

Analysts said Saudi Aramco wants to reassure investors by first presenting operating results covering the period of the attack, hence the delay. It's not known when Saudi Aramco will release its third quarter results, however.

“The official line was that the Q3 results were very good, so they want to update the analysts and market the IPO after the Q3 numbers,” said another source cited by Reuters.

This IPO will be one of the largest ever public offerings and should generate more than $20 billion for Saudi Aramco, which is Saudi Arabia's largest source of revenues.

The new delay is raising questions since Saudi Aramco executives have kept insisting the attacks would have no impact on Saudi Aramco's plans to list. The full restoration of oil output at Abqaiq, the country's largest oil refinery, was declared by Energy Minister Prince Abdulaziz bin Salman on Oct. 3

The Iranian missile and aerial drone attack on Saudi Aramco's Abqaiq oil refinery and the Khurais oil field temporarily knocked out half the company's crude output. Some analysts contend damage to Abqaiq and Khurais was apparently more serious than admitted, hence the IPO delay.

Saudi Aramco first intended to IPO in 2018 but postponed it after failing to agree on where to list.

On Sept. 17, Saudi Aramco confirmed its record-setting IPO will move forward as planned despite the disruptions and damage wrought by the Iranian attack. Saudi Aramco chairman Yasir al-Rumayyan at the time said preparations and paperwork for the company's highly anticipated initial public offering continue.

“The IPO is a commitment by the shareholder, the government of Saudi Arabia, and we think the IPO will continue as is, we are not going to stop anything,” said al-Rumayya

“This would make us even be firm when it comes to taking the company public, so I think anytime in the coming 12 months we’ll be ready as per the market opportunity.”