Profit of ExxonMobil decline by 40% in Q4 2016 due to impairment costs

ExxonMobilThe oil and gas giant ExxonMobil announced a profit decline by 40% in Q4 2016, because of serious impairment. Meanwhile, the revenue rose for the first time after nine consecutive quarters of declines. However, revenue growth is not as big as investors expected and the shares of the company collapsed during the Wall Street trading session. For the quarter ending December the largest US oil company reported a decline in profit to 1.68 billion USD, or 0.41 USD per share, from 2.78 billion USD, or 0.67 USD per share, for the same period of the previous year. The company’s revenues increased during the quarter to 61.02 billion USD, compared to 59.8 billion USD in the corresponding period of 2015.

“Financial results for the year were negatively impacted by the prolonged downturn in commodity prices and the impairment charge”, said the chairman and chief executive officer of ExxonMobil, Darren W. Woods.

The company said it has completed its review of the recoverability of assets during the quarter and reported a loss of describing the assets in the exploration and production of about 2 billion USD. Without it, profit rose to 3.7 billion USD.

The Exxon’s unit for development notes loss of 642 million USD, including the write-off of 2 billion USD. Without it, the achieved profit was 4 billion USD to 528 million USD in the corresponding period an year earlier. The division refining and sales recorded a profit of 1.2 billion USD.

ExxonMobil completed five major Upstream projects during the year in Australia, Kazakhstan and USA, adding 250,000 oil-equivalent barrels per day of working interest production capacity. The company’s capital and exploration expenditures during the quarter were 4.8 billion USD, down by 35% from the fourth quarter of 2015. The oil-equivalent production was 4.1 million oil-equivalent barrels per day, with liquids down 3.9% and natural gas down 1.7% from the prior year.

Exxon Mobil Corporation is an American multinational oil and gas corporation headquartered in Irving, Texas. It is US largest and world’s 8th largest by revenue.