Equinor’s weakest – scores 27 billion – E24

The company posted an adjusted profit of $ 780 million in the third quarter, up from $ 2.59 billion in the same period last year.

In advance, Equinor was expected to return an adjusted profit before tax of $ 1.03 billion, according to figures the company itself has compiled from 24 analysts.

In the third quarter of last year, the company posted an adjusted profit before tax of $ 2.59 billion.

In the adjusted result, Equinor removes “noise” and unique effects. According to the company, the goal is to provide the best possible picture of how the underlying operations of the company are performing.

After-tax profit is minus $ 2.13 billion in the third quarter, a decline of minus $ 1.1 billion in the same period last year.

Write values

Equinor records values ​​of 2.93 billion dollars, which is equivalent to 27.4 billion crowns. This means that the assets of the company have become less valuable. The reason is the weaker price outlook.

– Net amortizations in the third quarter are mainly due to low price assumptions. There is still considerable uncertainty associated with the future evolution of commodity prices, says CEO Eldar Sætre at Equinor.

Almost NOK 13 billion of write-offs take place on US land, where the company has previously noted values ​​significantly as well. Last year, Equinor declared that US stocks had totaled NOK 84 billion.

Recently, several analysts have been expecting significant writedowns at Equinor. Several other oil companies have downgraded the price outlook and marked their book values ​​significantly.

The debt ratio is increasing

Equinor and other oil companies have had a tough six months after the crown crisis lowered oil and gas prices and delayed many projects. The price of oil started the year at $ 66 a barrel and is trading at $ 39 a barrel on Thursday.

– Our financial results for the second quarter were affected by very low oil and gas prices due to the Covid-19 pandemic, says Sætre.

As Equinor’s assets decline in value, the company’s debt will account for a larger portion of the assets. This contributed to increasing the debt ratio to 31.6%, from 29.3% in the previous quarter.

Equinor’s share buyback worth more than NOK 9 billion by the government also contributes to an increase in the debt ratio in the quarter. Equinor completed the share buybacks after the crown crisis, but still owed the state NOK 9 billion.

Equinor’s revenue fell to $ 11.25 billion in the third quarter, from $ 14.70 billion in the same period last year.

Sætre’s last number drop

This is the last time Equinor has presented figures with CEO Eldar Sætre as CEO. Next Monday Anders Opedal will assume the presidency.

At the same time, Equinor CFO Lars Christian Bacher will also retire and Svein Skeie will act as CFO.

Equinor’s production in the third quarter was 1.99 million barrels of oil equivalent per day. In advance, it was expected at 1.93 million barrels per day.

Equinor achieved an average price of $ 39.6 a barrel for oil from the Norwegian platform, while analysts expected $ 39.3 a barrel. A year ago, Equinor received a comparison of $ 52.6 a barrel for its oil sales from the Norwegian platform.

Equinor received $ 39.1 a barrel for its international production in the third quarter, while it was expected $ 38.1 a barrel.

The company also reports two oil discoveries outside of Newfoundland in Canada on Thursday, but does not report any volumes.

This offers the various businesses

This is the development in the different companies that Equinor operates:

• On the Norwegian continental shelf, adjusted profit fell to $ 773 million in the third quarter, from $ 1.74 billion in the same period last year.
• The international business achieved an adjusted result of minus $ 104 million, compared to $ 451 million in the same period last year.
• The US business, which is now separated into a separate segment, had an adjusted result of minus $ 193 million, down from minus $ 16 million a year ago.
• The market, midstream and processing business achieved an adjusted result of $ 262 million, up from $ 448 million a year ago.

Many demanding cases

In addition to the crown crisis, Equinor has also had to deal with a number of other demanding cases in 2020: