Equinor first-quarter profit down 37% on lower gas prices

FILE PHOTO: A general view of the Equinor’s Johan Sverdrup oilfield platforms in the North Sea, Norway December 3, 2019. REUTERS/Ints Kalnins/File Photo

OSLO (Reuters) -Equinor posted a sharp fall in first-quarter profit on Thursday, hit by tumbling natural gas prices in Europe, though strong energy trading and rising output limited the decline.

The Norwegian oil and gas producer’s adjusted earnings before tax for January-March fell almost 37% to $7.53 billion but beat the $7.2 billion forecast in a poll of 22 analysts compiled by Equinor.

“Production on the Norwegian continental shelf was high,and the international portfolio contributed with solid production growth,” Equinor CEO Anders Opedal said in a statement.

The company overtook Russia’s Gazprom as Europe’s biggest supplier of natural gas in 2022 when Moscow’s invasion of Ukraine upended decades-long energy ties.

The Dutch TTF front-month gas contract, Europe’s benchmark, averaged 27.51 euros per megawatt hour (MWh) in the first quarter, down from 52.73 euros/MWh a year earlier, reflecting a mild winter and well-filled storage sites.

The logo of Equinor is set up at the entrance of a building at Western Europe’s largest liquefied natural gas plant Hammerfest LNG in Hammerfest, Norway, March 14, 2024. REUTERS/Lisi Niesner/ File Photo

“Equinor’s operating income beat the market consensus due to slightly higher output in the United States and strong results from both liquids and LNG trading,” RBC analyst Biraj Borkhataria said in a note.

Equinor pumped 2.16 million barrels of oil equivalent per day in the first quarter, in line with expectations in the analyst poll, and maintained a projection that this year’s oil and gas output will remain flat against 2023.

International oil and gas output rose by 3% from a year earlier, helped by last year’s acquisition of Suncor Energy’s British North Sea oil and gas assets and a 1% rise in domestic production.

Equinor’s Market, Midstream and Processing (MMP) division, which includes its trading business, posted a profit of $887 million, down from $1.3 billion a year ago but ahead of a poll forecast of $592 million.

The MMP result exceeded Equinor’s guidance range of between $400 million and $800 million, which the group said was thanks to strong results from liquids and LNG trading.

(Reporting by Nerijus Adomaitis and Nora BuliEditing by Terje Solsvik and David Goodman)