Home Finance Equinor posts record profit as gas prices soar in Europe

Equinor posts record profit as gas prices soar in Europe

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A common view of the Equinor’s Johan Sverdrup oilfield platforms within the North Sea, Norway December 3, 2019. REUTERS/Ints Kalnins

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  • Q1 pretax revenue $18 bln vs ballot forecast $17.1 bln
  • Conflict in Ukraine has lifted European fuel worth to information

OSLO, Could 4 (Reuters) – Equinor (EQNR.OL) reported file earnings on Wednesday, because the battle in Ukraine triggered an power provide crunch that despatched fuel costs hovering to all-time highs.

The state-controlled Norwegian firm has emerged as an enormous winner in Europe’s power disaster, producing $18 billion in adjusted pretax earnings within the first quarter because it bought fuel at costs greater than 4 occasions as excessive as a yr earlier.

“Continued capital self-discipline and price focus enabled us to ship very robust monetary outcomes and money movement, strengthening the steadiness sheet,” Chief Govt Officer Anders Opedal mentioned in a press release.

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The sale of pure fuel is now Equinor’s most worthwhile enterprise, exceeding historically dominant crude oil income, as Europe scrambles to fill depleted fuel storage amid fears the battle in Ukraine will result in a lack of Russian provides.

The $18 billion outcome in contrast with a revised $4.1 billion a yr earlier and beat the $17.1 billion predicted in a company-compiled ballot of 25 analysts.

The typical invoiced European pure fuel gross sales worth was 345% increased than within the first quarter of 2021 “on account of low fuel shares in Europe, excessive demand and tight provide,” Equinor mentioned.

“We’ve optimised the fuel manufacturing to ship increased volumes, and Hammerfest LNG is on monitor for a secure start-up on 17 Could,” Opedal mentioned, referring to an Arctic fuel facility that has been out of fee since a hearth in 2020.

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Nonetheless, whereas rivals Exxon Mobil (XOM.N), TotalEnergies (TTEF.PA) and BP (BP.L) just lately promised to extend their share buybacks, Equinor stood by a plan, introduced in February, for dividends and share buybacks of $10 billion in 2022. learn extra

“Given the web debt place and robust outcomes, in addition to friends growing buybacks in latest days, we do suppose there was some expectation of Equinor growing its distributions,” RBC Capital Markets mentioned in a notice to shoppers.

Brokers Jefferies mentioned Equinor’s determination to not distribute extra capital to homeowners would result in its share worth underperforming the market.

Equinor’s Oslo-listed shares had risen 0.9% by 0811 GMT, barely underperforming a 1.1% rise in European oil and fuel shares (.SXEP). Norway’s largest agency remains to be up 39% year-to-date, nevertheless.

The corporate reiterated its plan to withdraw from Russia, reserving a $1.1 billion impairment within the January-March quarter and dropping Russian crude provides, as beforehand introduced.

“Equinor has stopped buying and selling in Russian oil. Which means Equinor won’t enter into any new trades or interact in new transport of oil and oil merchandise from Russia,” the corporate mentioned.

Equinor maintained a quarterly dividend of 40 cents per share, as deliberate, half of which is an unusual payout and the opposite half seen as a unprecedented cost on account of excessive petroleum costs.

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Writing by Gwladys Fouche and Terje Solsvik; Enhancing by Subhranshu Sahu and Bradley Perrett

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