Equinor (NYSE: EQNR) is proposing a dividend increase for Q4 and aims to raise quarterly cash dividends each year as the Norwegian group and other oil majors look to reward shareholders after higher-than-expected profits for 2023.
Equinor reported on Wednesday adjusted earnings of $8.68 billion for the fourth quarter of 2023, slightly higher than the $8.46 billion expected in a consensus provided by the company, and much lower than in the same period of 2022, due to a significant decline in natural gas and crude oil prices.
Net income came in at $2.6 billion, down from $7.9 billion a year earlier, but higher than $2.46 billion expected in a FactSet poll.
The significantly lower natural gas prices “compared to the extraordinary price levels seen in 2022” more than offset the contribution from higher oil and gas production, Equinor said.
Equinor’s oil and gas output rose by 2.1% annually in 2023, above the company’s latest guidance of 1.5% growth, thanks to higher output at the giant Johan Sverdrup field, it said.
The board of directors proposes an ordinary cash dividend of $0.35 per share for the fourth quarter of 2023, up by $0.05 per share from the third quarter of 2023, and sets an ambition to grow the quarterly cash dividend by 2 cents per year, Equinor noted.
“We expect to grow our cash flow and sustain competitive returns. We are extending the outlook for stable contribution from oil and gas to 2035,” Equinor’s president and CEO Anders Opedal said.
“By 2030 we expect material and rapidly growing cash flow from our renewables and low carbon business.”
Equinor’s target to grow its dividend is in line with the trend among Big Oil to boost returns to shareholders. This earnings season, all major companies that have reported profits so far have announced more buybacks amid better-than-expected earnings. The U.S. supermajors Exxon and Chevron boasted record shareholder returns for 2023.
Earlier this week, BP was the latest to accelerate share buybacks as it joined Exxon, Chevron, and Shell in reporting forecast-beating earnings despite the decline in oil and gas prices.
By Tsvetana Paraskova for Oilprice.com
