Dow Jones Newswires: Equinor swings to surprise loss on lower prices, big impairments

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Equinor ASA Thursday swung to an unexpected fourth-quarter net loss as earnings were weighed on by lower prices and hefty impairments.

Equinor EQNR, +2.74%  posted a net loss of $236 million, from a profit of $3.37 billion a year earlier, as revenue fell 31% to $14.9 billion. Earnings last year were boosted by high oil and gas prices and hefty one-off items.

Analysts polled by FactSet had expected net profit of $1.39 billion on revenue of $17.16 billion.

Adjusted earnings fell 19% to $3.55 billion against expectations of $3.64 billion.

The company, which is 67%-owned by the Norwegian state, proposed a slightly higher dividend of 27 cents for the fourth quarter.

Equinor said earnings in the quarter suffered from lower commodity prices and $1.43 billion of impairment losses related to associated companies, derivatives and inventory hedge contracts, and write-downs of inventory.

“Record high production, reduced costs and continued strong capital discipline contributed to solid results in a quarter with lower commodity prices,” said Chief Executive Eldar Saetre.

“Going forward, we expect to grow production, returns and cash flow from a world-class project portfolio, representing 6 billion barrels to Equinor with an average break-even oil price below $35 per barrel.”

Equinor delivered total equity production of 2.198 million barrels of oil equivalent a day in the fourth quarter, up from 2.170 million barrels a day the prior year.

The company expects average annual organic capital expenditure of $10 billion to $11 billion in 2020 and 2021, and around $12 billion for 2022 and 2023. It aims to deliver around 7% growth in production in 2020, and average annual production growth of around 3% from 2019 to 2026.

Exploration spending in 2020 is seen at around $1.4 billion.

The company also said it targets long term value creation in line with the Paris Agreement. Equinor aims to reach carbon neutral global operations by 2030, by developing as a global offshore wind major and reducing net carbon intensity of energy produced by at least 50% by 2050.