OSLO: Norwegian petroleum giant Statoil was deprived of almost half of its operating profit in the fourth quarter compared with the previous year, writes NRK.
Oil prices on a free fall and huge depreciation cost the company tens of billions of Norwegian Kroner in 2015.
Statoil managed to achieve the adjusted earnings of only 15.2 billion before tax and an adjusted operating profit of 1.6 billion (tax included) in the fourth quarter of 2015, according to NRK.
During the same period last year Statoil earned 26.9 billion before tax. Thus, the actual results of the company’s operating activities almost halved in 2015.
The experts were predicting for Statoil the adjusted earnings of 13.8 billion before tax and operating profit of 31 billion after taxation.
Obviously, pre-tax profit of Statoil showed better results than expected, however the total profit after the tax was calculated is significantly weaker than the analysts predicted.
As for the whole year in 2015 the total profit of Statoil also halved due to the free fall of oil prices, down from 136 billion to 77 billion.
Our entire industry is characterized by a relatively weak market in the fourth quarter. At the same time, the results showed that we made a good progress towards our improvement, comments Statoil’s CEO Eldar Sætre to NRK in London.
However, the whole picture is quite intimidating.
The fiscal result for the company, the so-called IFRS profit is minus 37.3 billion NOK. In 2014 this number was -8,9 billion.
This poor performance is greatly affected by both the oil prices and that the group has had to write down the value of assets in the balance sheet. The latter was unavoidable with the falling oil prices.
We have improved the price necessary for us to achieve the profitability with $ 30 per barrel compared to the price of two years ago, and it is a formidable work, says Sætre.
According to NRK, Statoil writes in the report that the cuts in the company’s expenses will be increased by 50 percent to $ 2.5 billion in 2016. This equals to 21 billion of cost reduction.
In addition, the investments for this year are to be cut correspondingly with 11 billion compared with 2015.