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Norway's Equinor Q2 operating profit down; refinery and trading unit shines

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Equinor maintained a quarterly dividend of US$0.09 per share, identical to the first quarter but down from US$0.27 in October-December.

[OSLO] Energy firm Equinor on Friday reported a sharp drop in second-quarter operating profit that beat analysts' estimates, as strong performance by its refinery and trading unit countered impact of a coronavirus-led slump in oil and gas prices.

The Norwegian oil and gas explorer posted an 89 per cent slump in its adjusted earnings before interest and tax (Ebit) to US$0.35 billion in the April-June quarter, compared with US$3.15 billion in the year-ago period. A poll of 25 analysts compiled by Equinor had forecast an adjusted operating loss of US$0.2 billion.

While all three oil exploration and production units, E&P Norway, E&P International and E&P USA, posted losses, its refinery and trading unit saw a rise in profits.

"Our financial results for the second quarter were impacted by very low realised oil and gas prices due to the Covid-19 pandemic, but also by a strong trading performance in volatile markets," Chief Executive Officer Eldar Saetre said in a statement.

"We have reduced costs, maintained solid operational performance and continued to prioritise value over volume by deferring significant flexible gas production to periods with higher expected prices."

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The Norwegian government has imposed limits on oil output from June to December this year, backing efforts by the Opec+ nations and others to support oil prices.

Equinor maintained a quarterly dividend of US$0.09 per share, identical to the first quarter but down from US$0.27 in October-December.

The company reiterated its goal of increasing output by 3 per cent per year from 2019 to 2026, and kept capital spending plans for this year unchanged at US$8.5 billion.

Equinor now expects crude oil prices to average US$41 a barrel in 2020, up from a previous view of US$39 a barrel seen in May, but it kept its long-term price assumptions unchanged, unlike other European majors.

The company has previously said it planned to revise its long-term price outlook, which could impact assets values, in the third-quarter. 

REUTERS

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