By Equinor, the Norwegian energy major, has announced that it will return $14 billion to shareholders through dividends and share buybacks this year. Although this amount is $3 billion less than what it paid out in 2023, it still exceeds analysts’ expectations.
Focus on Cash Returns
Cash returns have been a major focus for Equinor’s European peers such as Shell, BP, and TotalEnergies, all of whom have committed to generous payouts despite volatile energy prices.
Dividend Details
Equinor will pay an ordinary dividend of $0.35 and an extraordinary dividend of $0.35 for the fourth quarter. While this is a decrease from the $0.30 ordinary and $0.60 extraordinary dividend paid in the third quarter, Equinor has indicated its ambition to increase the quarterly cash dividend by $0.02 per year.
Share Buybacks
Equinor also plans to buy back shares worth $10 billion-$12 billion over the next two years, with $6 billion expected in 2024.
Analyst Expectations
RBC Capital Markets’ Biraj Borkhataria noted, “Equinor is pointing to $14 billion of distributions in 2024. This is above consensus expectations which we believe were in the $12 billion-$13 billion range.”
Impact of Gas Prices
The company stated that gas prices are now significantly lower than the extraordinary levels seen in 2022. However, they have more than offset the higher oil production during the fourth quarter.
Production Achievements
In 2023, Equinor recorded a 2.1% increase in oil and gas production compared to the previous year, surpassing its guidance for 1.5% growth. Looking ahead to 2024, the company expects stable oil and gas production.
Equinor’s commitment to returning value to its shareholders despite the challenges of energy market fluctuations is noteworthy.
Equinor Aims to Maintain Strong Oil and Gas Production
Equinor, a leading energy company, has set its sights on maintaining a robust oil and gas production level of approximately 2 million barrels of oil equivalent per day until 2030. This goal builds upon the success of producing 2.08 million barrels in 2023.
Doubling Down on Renewable Power
Equinor is also committed to doubling its annual power production from renewable sources in the current year. With a solid foundation and strong cash flow, the company is well-positioned for profitable growth. Equinor’s comprehensive energy offering and commitment to reducing emissions will pave the way for a brighter future until 2035.
According to Chief Executive Anders Opedal, “We are extending the outlook for stable contribution from oil and gas to 2035. By 2030 we expect material and rapidly growing cash flow from our renewables and low carbon business.”
Financial Performance Highlights
While Equinor’s adjusted earnings fell to $8.68 billion in the fourth quarter compared to $17.01 billion previously, it is worth noting that this figure exceeded the $8.46 billion expected by industry analysts. Moreover, Equinor generated a net profit of $2.6 billion during the same period, as opposed to $7.9 billion the previous year. These results exceeded expectations, which were anticipated to be around $2.46 billion according to a FactSet poll.
Revenue and Capital Expenditure Outlook
Equinor experienced a 15% decline in revenue, with figures reported at $28.84 billion. However, the company remains optimistic about its organic capital expenditure, projecting around $13 billion in investments for 2024.
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