As gas prices increased and the fourth quarter’s results exceeded expectations, Equinor on Wednesday announced a record $74.9 billion adjusted operating profit for 2022, more than doubling its previous high. This news helped to increase the company’s stock price by 7%.

The adjusted earnings before tax and interest for the Norwegian oil and gas producer for the months of October through December increased to $15.1 billion from $15 billion a year earlier, exceeding the $14.4 billion forecasted in a poll of 25 analysts compiled by Equinor.

In addition to increasing its regular quarterly dividend, Equinor predicted that over the next ten years it will generate an annual cash flow from operations after taxes of about $20 billion.

The net profit for the year increased from $8.6 billion to $28.7 billion. The business reported record bottom lines, joining global oil and gas giants like ExxonMobil, Shell, and BP.

Analyst Teodor Sveen-Nilsen at Sparebank 1 Markets predicted that investors would pay close attention to Equinor’s dividends and share repurchases.

“We expect the share to outperform peers today,” he said in a note to clients.

Due to Russia’s Gazprom cutting back on deliveries in response to Western support for Ukraine, which caused European gas prices to reach all-time highs, the majority state-owned company last year emerged as Europe’s top natural gas supplier.

Despite the drop in gas prices in the new year, Equinor’s Oslo-listed stocks have lost 9% of their value so far this year, underperforming a 1.3% increase in European petroleum stocks.

“On the back of strong earnings, outlook, and balance sheet, we step up capital distribution to (an) expected $17 billion in 2023,” chief executive Anders Opedal said in a statement.

The better than anticipated results in Equinor’s refining and trading operation, which were aided by LNG and gas sales, were responsible for the quarterly earnings beat, according to RBC analyst Biraj Borkhataria in a note.

According to Equinor, it will pay an additional, extraordinary payment of $0.60 per share for four consecutive quarters in addition to its regular quarterly dividend of $0.30 per share, up from $0.20, for a total of about $11 billion in dividends this year.

The board announced that it would continue to buy back shares on a regular basis for $1.2 billion annually and an extraordinary buyback for $4.8 billion in 2023, for a total of $6 billion.

The total oil and gas output of Equinor decreased by 2% annually in 2022 to 2.04 million barrels of oil equivalent per day (boed), but the company anticipates a 3% increase in 2023.

As the company concentrated on replacing lost Russian supplies to Europe, gas output from its Norwegian fields increased by 8% compared to a year earlier, while oil output fell by 6%, it added.

When the price of North Sea oil reached record highs in 2008, Equinor’s previous adjusted earnings record stood at $36.2 billion.

The business, which derives the majority of its revenue from oil companies taxed at a rate of 78% in Norway, predicted it would have to pay a record $49.9 billion in taxes in 2022.

Equinor said it expected capital spending for 2023 at between $10 billion and $11 billion, broadly in line with a previous plan. It raised it spending projection for the next three years to $13 billion per year from $12 billion seen before.

According to Equinor, capital expenditures for 2023 are anticipated to be between $10 billion and $11 billion, roughly in line with an earlier plan. It increased its spending forecast for the following three years from the previous $12 billion to $13 billion annually.

“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.

(Adapted from EuroNews.com)