High refining throughput and effective cost control boost 3Q earnings
- Best-ever refining throughput in North America, together with high oil and gas production leads to an improved diluted EPS of US$4.68 in 3Q22
- Announced the largest-of-its-kind commercial agreement for carbon capture and storage
- Declared robust dividend per share of US$0.91 in 3Q22, up from US$0.88 per share in 2Q22
Robust earnings and healthy shareholder return. Exxon Mobil Corp (Exxon) posted earnings of US$19.7bn in 3Q22 in comparison to US$17.9bn in 2Q22 mainly due to best-ever refining throughput in North America (highest since 2008) on a quarterly basis. Further, higher natural gas prices and increased production added to the earnings hike despite a drop in average crude prices q-o-q. Exxon’s upstream segment achieved high oil-equivalent production of 3.7 mmboepd. In 3Q22, operating cash flow improved to US$30.5bn (up from US$18.9bn in 2Q22) with a healthy free cash flow of US$22bn boosted by cash accumulating from asset sales and divestments. Exxon’s gearing levels also improved, where debt-capital ratio is down to 19%, reaching slightly below the minimum target range. Total shareholder distributions amounted to US$8.2bn for 3Q22, which comprised of US$3.7bn in dividends and US$4.5bn of share repurchases. Exxon’s dividend distributions are expected to remain on growth track in 4Q22. Further, the company’s robust share repurchase strategy is on track to achieve its target of US$30bn through 2023.
Heavy investment in carbon capture and storage to secure a low carbon future. Exxon’s overall capital expenditure amounted to US$5.7bn in 3Q22 (YTD: US$15.2bn), on track to reach its 2022 yearly range of US$21 – 24 bn. A particular announcement to note will be the largest-of-its-kind commercial agreement to capture and store up to 2mn metric tonnes of carbon dioxide emissions annually. This project is expected to commence in 2025 and will support Louisiana’s net zero carbon emissions objective by 2050. Further, Exxon’s majority owned affiliate has announced a contract to transport low carbon hydrogen by pipeline from its hydrogen plant. This low carbon hydrogen is expected to drastically reduce green gas emissions as it will be used in the production of renewable diesel.
