- Adjusted operating profit $8.68 bln vs forecast $8.46 bln
- Shareholder payments in 2024 $14 bln vs $17 bln in 2023
- Oil and gas output grew 2.1% in 2023 vs Oct forecast 1.5%
- Shares fall 4.2%
LONDON, Feb 7 (Reuters) - Equinor said on Wednesday it would cut its overall cash returns to shareholders this year by $3 billion, sending its shares down 4% even as it posted a slightly smaller-than-expected drop in operating profit for the final quarter of 2023.
The Norwegian oil and gas producer's adjusted earnings before tax for October-December fell to $8.68 billion from $17.0 billion a year earlier amid lower energy prices, but beat the $8.46 billion seen in a poll of 26 analysts compiled by Equinor.
"We expect to grow our cash flow and sustain competitive returns," CEO Anders Opedal said in a statement.
Rivals including BP, Exxon Mobil, Chevron and Shell also beat fourth-quarter profit forecasts, supported by a mix of strong trading results and higher oil and gas production, but some of them announced plans to increase dividends and share buybacks.
Equinor said its combined dividend payments and share buybacks in the 2024 calendar year were expected to amount to $14 billion, down from $17 billion last year, reflecting a normalisation of gas prices during 2023.
The company maintained a projection for capital expenditure in 2024 of $13 billion but said it would spend some $14 billion to $15 billion per year in 2025-2027, up from a previous guidance of $13 billion for 2024-2026.
Equinor's shares were down 4.2% at 0859 GMT, lagging a 0.2% rise in the European oil and gas sector.
The group's combined oil and gas output increased by 2.1% in 2023 thanks to a strong finish to the year, and exceeded the company's October guidance of 1.5% growth.
The rise was mainly driven by strong production at the Johan Sverdrup field, the largest in the North Sea, and new wells in production, Equinor said.
"The production increase was also driven by contributions from the international portfolio with (Brazil's) Peregrino field reaching plateau production and strong performance from U.S. offshore assets," it added.
Equinor said its production would be unchanged in 2024 before rising by 5% by 2026. It would then decline somewhat towards 2030 to around 2 million barrels of oil equivalent per day, down from about 2.2 million in the fourth quarter of 2023.
In addition, the group's domestic Norwegian unit set a target of pumping 1.2 million barrels of oil equivalent per day in 2035, down from 1.37 million in 2023.
The company raised its ordinary quarterly dividend payment to $0.35 per share from $0.30 but said its extraordinary cash dividend would be cut to $0.35 per quarter from $0.60.
Equinor said it planned to spend $6 billion on share buybacks in 2024, equal to 2023. In 2025 it plans buybacks of between $4 billion and $6 billion.
The company plans to increase the regular part of its quarterly dividend payments by $0.02 each year going forward, while extraordinary dividends would come to an end after 2024.
Equinor warned last month that earnings in its Marketing, Midstream & Processing (MMP) unit, which includes refining, were expected to be at the low end of its guided range of $400 million to $800 million, hit by weak margins.
The MMP division on Wednesday reported a profit of $424 million, while analysts on average had expected $461 million.
Equinor in 2022 overtook Russia's Gazprom as Europe's biggest supplier of natural gas as Moscow's invasion of Ukraine upended decades-long energy ties.
The Norwegian group's full-year adjusted earnings totalled $36.2 billion, down from a record $76.9 billion in 2022 as the price of gas declined sharply.
Reporting by Nerijus Adomaitis in London and Nora Buli in Oslo Editing by Terje Solsvik, Kim Coghill and Mark Potter
Source: Reuters