Equinor Swings to Surprise Loss on Lower Prices, Hefty Impairments
February 06 2020 - 2:10AM
Dow Jones News
By Dominic Chopping
Equinor ASA (EQNR.OS) Thursday swung to an unexpected
fourth-quarter net loss as earnings were weighed on by lower prices
and hefty impairments.
Equinor posted a net loss of $236 million, from a profit of
$3.37 billion a year earlier, as revenue fell 31% to $14.9 billion.
Earnings last year were boosted by high oil and gas prices and
hefty one-off items.
Analysts polled by FactSet had expected net profit of $1.39
billion on revenue of $17.16 billion.
Adjusted earnings fell 19% to $3.55 billion against expectations
of $3.64 billion.
The company, which is 67%-owned by the Norwegian state, proposed
a slightly higher dividend of 27 cents for the fourth quarter.
Equinor said earnings in the quarter suffered from lower
commodity prices and $1.43 billion of impairment losses related to
associated companies, derivatives and inventory hedge contracts,
and write-downs of inventory.
"Record high production, reduced costs and continued strong
capital discipline contributed to solid results in a quarter with
lower commodity prices," said Chief Executive Eldar Saetre.
"Going forward, we expect to grow production, returns and cash
flow from a world-class project portfolio, representing 6 billion
barrels to Equinor with an average break-even oil price below $35
per barrel."
Equinor delivered total equity production of 2.198 million
barrels of oil equivalent a day in the fourth quarter, up from
2.170 million barrels a day the prior year.
The company expects average annual organic capital expenditure
of $10 billion to $11 billion in 2020 and 2021, and around $12
billion for 2022 and 2023. It aims to deliver around 7% growth in
production in 2020, and average annual production growth of around
3% from 2019 to 2026.
Exploration spending in 2020 is seen at around $1.4 billion.
The company also said it targets long term value creation in
line with the Paris Agreement. Equinor aims to reach carbon neutral
global operations by 2030, by developing as a global offshore wind
major and reducing net carbon intensity of energy produced by at
least 50% by 2050.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
February 06, 2020 01:55 ET (06:55 GMT)
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