Equinor (EQNR.OL) surpassed first-quarter profit projections on Thursday, powered by energy trading, but earnings were significantly below last year’s record due to a severe drop in natural gas prices.
The oil and gas producer’s adjusted earnings before interest and tax for January-March dipped to $12 billion from $18 billion a year earlier. Still, they surpassed Equinor’s poll of 26 experts’ prediction of $11.2 billion.
“Equinor delivered strong earnings and cash flow across the business and remains a safe and reliable provider of energy to Europe,” stated CEO Anders Opedal.
Production, capital expenditure, and dividend guidance were unchanged.
Equinor’s January-March adjusted operating profit fell from $15.1 billion in the fourth quarter.
Last year, Russia’s Gazprom (GAZP.MM) reduced supply due to the West’s backing for Ukraine, driving European gas prices to record highs.
In the first quarter, all major Equinor businesses surpassed expectations. Still, very good’ trading earnings in its midstream division (MMP) spanning oil and gas were the main driver, RBC analyst Biraj Borkhataria told clients.
Equinor’s report indicated that the MMP segment turned a $92 million deficit into a $1.28 billion pretax profit, exceeding the average analyst projection of $986 million.
In the first quarter, Equinor’s average gas sales price to Europe fell 37%, while oil fell 24%.
In the first quarter, the group’s oil and gas production rose to 2.13 million barrels of oil equivalent per day (bored) from 2.1 million a year earlier as Johan Sverdrup Phase 2 and Snoehvit in Norway and Peregrino in Brazil offset depletion elsewhere.
The business said that gas volumes increased 1% year-over-year and made up more than 55% of output, “contributing to European energy security,” the business said.
In 2022, Equinor’s adjusted operating profit reached a record $74.9 billion, more than double from 2008.
Equinor’s share price is down 16.6% year-to-date, behind European petroleum stocks (.SXEP) by 4.2%.
