By Nerijus Adomaitis and Nora Buli
OSLO/LONDON (Reuters) - Equinor posted a record $74.9 billion adjusted operating profit on Wednesday, more than doubling its previous high and sending the Norwegian oil and gas producer's shares up more than 7%.
With net profit for the year of $28.7 billion, up from $8.6 billion a year earlier, Equinor joined global oil and gas majors such as ExxonMobil (NYSE:XOM), Shell (LON:RDSa) and BP (NYSE:BP) in reporting record returns for 2022.
Majority state-owned Equinor became Europe's largest supplier of natural gas last year as Russia's Gazprom (MCX:GAZP) cut deliveries over the West's support for Ukraine, sending European gas prices to all-time highs.
But gas prices have tumbled in 2023 and Equinor's Oslo-listed stocks have fallen 9% year-to-date, underperforming a 3.3% rise in European petroleum stocks.
Adjusted earnings before tax and interest for October-December hit $15.1 billion, from $15 billion a year before and above the $14.4 billion forecast in an Equinor poll of analysts.
RBC analyst Biraj Borkhataria said in a note this was due to better than expected results in Equinor's refining and trading operation, which was boosted by LNG and gas sales.
Equinor also raised its regular quarterly dividend and said it expected to see annual cash flow from operations after tax of around $20 billion per year for the rest of the decade.
Graphic: Equinor adjusted earnings hit record high in 2022- https://www.reuters.com/graphics/EQUINOR-RESULTS/dwpkdelejvm/chart.png
"On the back of strong earnings, outlook, and balance sheet, we step up capital distribution to (an) expected $17 billion in 2023," Equinor CEO Anders Opedal said in a statement.
Equinor said it would pay a regular quarterly dividend of $0.30 per share, up from $0.20, and make an additional, extraordinary payment of $0.60 per share for four consecutive quarters, totalling about $11 billion in dividends this year.
The board reaffirmed a regular share buyback plan of $1.2 billion per year and said it would make an extraordinary buy back in 2023 of $4.8 billion, for a total of $6 billion.
Equinor said its overall oil and gas production fell by 2% year-on-year to 2.04 million barrels of oil equivalent per day (boed) in 2022, but it expected this to grow by 3% in 2023.
A senior executive said it is investigating the possibility of boosting output from Western Europe's largest oilfield, Johan Sverdrup, to 755,000 barrels per day (bpd) from 720,000 bpd.
Gas output from its Norwegian fields was up by 8% on a year earlier as the company focused on replacing lost Russian supplies to Europe, while oil output declined by 6%, it added.
Equinor's previous adjusted earnings record was $36.2 billion in 2008, when North Sea oil prices hit record highs.
The company, which makes most of its profit in Norway, where oil firms are subject to a tax rate of 78%, said it expected to pay a record $49.9 billion in taxes for 2022.
"The combination of this (of dividend and share buybacks) is likely to be well ahead of market expectations, and signals a strong message to the market on intentions to pay out to shareholders," RBC's Borkhataria said.