Special dividend and buyback
Shell and Equinor continue to earn well
05/04/2023, 02:08 p.m
The Norwegian oil company Equinor has become Europe’s most important supplier after Russia’s war of aggression. Despite lower prices, the company continues to earn well. Competitor Shell can also keep up the profit. As a result, both continue to pay out billions to shareholders.
Surpluses from oil and gas trading cushioned losses at Shell and Equinor from falling energy prices at the start of the year. The two companies announced surprisingly high profits, similar to their competitors BP, Exxon and Chevron.
According to the information, Shell’s net profit rose from 9.1 billion to almost 9.7 billion euros over the year. Analysts had expected a decline on average. Net income was $8.7 billion, compared to $10.4 billion in the fourth quarter and $7.1 billion in the first quarter of 2022, up nearly 140 percent to $1.8 billion in the Chemicals and Refined Products division prevented this. Among other things, the group benefited from the increased demand for LNG liquid gas. Shell is the world’s largest retailer of this product.
Analyst Giacomo Romeo from the investment bank Jefferies praised the Shell numbers as strong overall. “The decision to leave the quarterly share buyback rate unchanged at $4 billion should be well received, especially after BP’s cut earlier this week.”
Equinor wants to pay out 17 billion euros
The Norwegian oil and gas group Equinor suffered a slump in adjusted operating profit – its preferred metric – by a third to $ 12 billion in the first quarter. However, analysts had predicted an even bigger drop. However, net profit increased to almost five billion euros.
Equinor has risen to become Europe’s largest supplier due to the loss of Russian gas imports as a result of the Ukraine war. All business areas have developed better than expected, commented analyst Biraj Borkhataria from the investment bank RBC Capital Markets. However, the “very strong” MMP division, to which energy trading belongs, should be emphasized.
Equinor’s realized price for pipeline gas to Europe fell 37 percent year-on-year, while realized prices for LPG fell 24 percent. The lower prices were partially offset by production growth, the company said. Sales fell by a fifth to $29.2 billion.
The company maintained its quarterly dividend of $0.30 and declared another extraordinary dividend of $0.60. Equinor is set to begin the second tranche of share buybacks totaling nearly $1.7 billion and expects a total capital return of $17 billion this year. The company is 67 percent owned by the state.