Equinor posts record profit as gas prices soar in Europe

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

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

The state-controlled Norwegian firm has emerged as a giant 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 value focus enabled us to ship very sturdy monetary outcomes and money circulation, strengthening the steadiness sheet,” Chief Government Officer Anders Opedal mentioned in an announcement.

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 struggle in Ukraine will result in a lack of Russian provides.

The $18 billion consequence 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 common invoiced European pure fuel gross sales value was 345% larger than within the first quarter of 2021 “attributable to low fuel shares in Europe, excessive demand and tight provide,” Equinor mentioned.

“Now we have optimised the fuel manufacturing to ship larger volumes, and Hammerfest LNG is on observe for a protected start-up on 17 Might,” Opedal mentioned, referring to an Arctic fuel facility that has been out of fee since a hearth in 2020.

Nonetheless, whereas rivals Exxon Mobil (XOM.N), TotalEnergies (TTEF.PA) and BP (BP.L) not too long ago 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 online debt place and robust outcomes, in addition to friends rising buybacks in current days, we do assume there was some expectation of Equinor rising its distributions,” RBC Capital Markets mentioned in a be aware to purchasers.

Brokers Jefferies mentioned Equinor’s determination to not distribute extra capital to homeowners would result in its share value 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 continues 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 that Equinor is not going to 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 extraordinary payout and the opposite half seen as a rare cost attributable to excessive petroleum costs.

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

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