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OSLO (Reuters) – Norway’s Equinor reported a record quarterly pretax profit on Wednesday, as the war in Ukraine triggered an energy supply crunch that sent natural gas prices soaring to all-time highs.
Adjusted earnings before tax rose to $18 billion in the first quarter, up from a revised $4.1 billion a year earlier, and beating the $17.1 billion predicted in a poll of 25 analysts compiled by Equinor.
“Continued capital discipline and cost focus enabled us to deliver very strong financial results and cash flow, strengthening the balance sheet,” Chief Executive Officer Anders Opedal said in a statement.
The sale of natural gas is now Equinor’s most profitable business, exceeding traditionally dominant crude oil revenue, as Europe scrambles to fill depleted gas storages amid fears the war in Ukraine will lead to a cut-off of Russian supplies.
The average invoiced European natural gas sales price was 345% higher than in the first quarter of 2021 “due to low gas stocks in Europe, high demand and tight supply,” Equinor said.
“We have optimised the gas production to deliver higher volumes, and Hammerfest LNG is on track for a safe start-up on 17 May,” Opedal said, referring to an Arctic gas facility that has been out of commission since a fire in 2020.
The company reiterated its plan to withdraw from Russia, booking a $1.1 billion impairment in the January-March quarter and dropping Russian crude supplies, as previously announced.
“Equinor has stopped trading in Russian oil. This means that Equinor will not enter into any new trades or engage in new transport of oil and oil products from Russia,” the company said.
Equinor maintained a quarterly dividend of 40 cents per share, as planned, half of which is an ordinary payout and the other half seen as an extraordinary payment due to high petroleum prices.
Equinor’s Oslo-listed stocks have risen 38% year-to-date, outperforming a 19% rise in European oil and gas stocks.
