ExxonMobil Q4 Profits Down on Weak Downstream

Fourth-quarter profits at ExxonMobil were down 5.2%, the US major reported on January 31, as divestments failed to offset weak downstream performance.

Net income came to $5.69bn in the three months ending December 31, down from $6bn a year earlier. Results were propped up by $3.9bn in one-off gains, of which $3.7bn came from its $4.5bn sale of ExxonMobil''s Norwegian business to Eni subsidiary Var Energi.

ExxonMobil’s chemicals business swung to a $355mn loss in the quarter, versus a $241mn profit a year earlier, with the company citing weakened margins caused by lower prices and higher feed costs. Its oil refining segment posted a two-thirds decline in income to $989mn, because of lower fuel demand and increased supply.

Upstream profits almost doubled to $6.07bn. But excluding one-off gains, they were down 45% at $1.82bn. Production was flat at around 4.02mn boe/day, as gains in Asia and the Americas were offset by lower output in Africa, Europe and Oceania. Revenues slumped as a result of lower gas prices, higher maintenance and an unfavourable tax impact.

“Our operations performed well, while short-term supply length in the downstream and chemicals businesses impacted margins and financial results,” CEO Darren Woods commented. “Growth in demand for the products that underpin our businesses remains strong. We remain focused on improving our base businesses, driving efficiencies, and optimising the value of our investment portfolio.”

ExxonMobil announced plans last November to shed some $25bn of assets in Asia, Africa and Europe by 2025, with $15bn slated for sale by 2021. Its aim is to free up capital to inject into megaprojects in Mozambique, Papua New Guinea, Guyana, Brazil and the US.