Equinor returns another $3 billion to owners as second-quarter profit beats forecast

Equinor’s logo is seen at the company’s headquarters in Stavanger, Norway December 5, 2019. REUTERS/Ints Kalnins/File Photo

OSLO, July 27 (Reuters) – Equinor (EQNR.OL) will return an additional $3 billion to its shareholders, the Norwegian oil company said on Wednesday after reporting second-quarter profit that beat expectations due to soaring oil prices. war-fueled gas in Ukraine.

The company increased gas supplies to Europe by 18% in the April-June period from a year ago, making Norway the continent’s largest supplier of piped natural gas as the Russia cut deliveries amid a stalemate with the West during the war.

“Equinor has become Europe’s most important energy supplier during this conflict, so it is essential that we provide reliable operations,” chief executive Anders Opedal told a news conference.

Adjusted pretax profit jumped to $17.6 billion in the second quarter from $4.6 billion a year earlier, beating the $16.9 billion forecast in a poll of 26 analysts compiled by Equinor.

The company raised its 2022 dividend and share buyback forecast by 30% to a total of about $13 billion, from $10 billion announced in February.

Equinor raised its special dividend, paid due to high oil and gas prices, to $0.50 per share for the second and third quarters from $0.20, the increase corresponding to about $2 billion.

The company’s regular quarterly payout, which remains at $0.20 per share.

“Given Equinor’s net cash position, it is plausible that promotions (dividends) will likely continue through 2023,” RBC Capital Markets wrote in a note to clients.

The company said it now expects share buybacks of $6 billion in 2022, down from a previous projection of $5 billion.

Majority state-owned Equinor is the first European oil company to report second-quarter results, with Shell (SHEL.L) and TotalEnergies (TTEF.PA) reporting on Thursday.

Oslo-listed Equinor shares are up 1.7% at 0919 GMT and 54% so far this year, beating a 13% rise in European oil and gas stocks (.SXEP).

A DEMANDING WINTER

The company restarted its LNG plant outside the Arctic town of Hammerfest in May after a 20-month outage, further boosting gas deliveries.

Russia’s Gazprom (GAZP.MM) warned on Monday that supplies through the Nord Stream 1 gas pipeline to Germany would fall to just 20% of capacity due to technical problems, threatening Europe’s plans to fill its storages with gas before the winter heating season. Read more

European Union energy ministers on Tuesday approved a proposal asking member states to voluntarily reduce their gas consumption by 15% from August to March. Read more

“It’s hard to predict what the coming winter will look like, but it will certainly be a demanding time for Europe,” Opedal said.

Equinor’s overall oil and gas production was broadly unchanged year-over-year at 2.0 million barrels of oil equivalent per day (boed), as its international production fell.

The company maintained its full-year production guidance of a 2% increase over 2021.

As Equinor’s cash flow continued to grow, its adjusted net debt headed further into negative territory, meaning the company had more cash and financial investments than gross debt.

Its net debt to capital employed ratio stood at -38.6% at the end of June against -22.2% at the end of March.

Earlier this year, Equinor withdrew from Russia following Moscow’s February 24 invasion of Ukraine, recording a $1.1 billion write-down in the first quarter. He also stopped trading Russian oil.

Reporting by Nerijus Adomaitis, editing by Terje Solsvik, Stephen Coates and Tomasz Janowski

Our standards: The Thomson Reuters Trust Principles.