Asset sales, tax buoy ExxonMobil

by on July 26, 2012 12:24 pm BST

Production dropped and US upstream earnings were slashed as commodity prices went down, but the downstream segment benefitted from divestments.

Net profit for the three months to the end of June was $15.9 billion, well up on the $10.68 billion seen in the comparable period a year ago.

However, the quarter included a net gain of $7.5 billion associated with divestments and tax-related items, without which the net profit would have been $8.4 billion.

At the top line, revenues rose from $125.49 billion to $127.36 billion while the US oil giant managed to cut total costs from $106.87 billion to $101.17 billion.

US upstream earnings slumped from $1.45 billion to $678 million, a fall of $771 million. Non-US upstream earnings were, however, up $588 million to $7.68 billion.

In the downstream segment the US numbers rose from $734 million to $834 million while the non-US segment ballooned from $622 million to $5.82 billion

The vast majority of this – $5.3 billion – resulted from the sale of downstream assets in Japan towards the end of the quarter.

“All other items, including unfavorable foreign exchange effects, higher operating expenses, and one-time tax items, decreased earnings $670 million,” ExxonMobil wrote on Thursday.

Total oil equivalent production decreased 5.6% while the energy behemoth also had to contend with weakened realised oil and US natural gas prices.

Chairman Rex Tillerson said: “Capital and exploration expenditures were $9.3 billion in the second quarter and a record $18.2 billion for the first six months of 2012 as we progress our plans to invest about $37 billion per year over the next five years to help meet the global demand for energy.”