Equinor(US:EQNR)2023-05-03 16:00Financial Performance - Equinor reported adjusted earnings of USD 12.0 billion and net income of USD 4.97 billion for Q1 2023, reflecting a decrease of 33% and 5% respectively compared to Q1 2022[7][9]. - Net operating income was USD 12.5 billion, down 32% from USD 18.4 billion in Q1 2022, while total revenues decreased by 20% to USD 29.2 billion[9][24]. - Cash flow from operations after taxes paid was USD 9.72 billion, down 38% from USD 15.75 billion in Q1 2022[19][24]. - Total revenues and other income for Q1 2023 were USD 12,044 million, down 35% from USD 18,454 million in Q1 2022[54]. - Net operating income for Q1 2023 was USD 9,816 million, a 42% decrease from USD 16,933 million in Q1 2022[54]. - Total revenues for Q1 2023 were USD 29,210 million, a decrease of 14.5% compared to Q1 2022's USD 36,050 million[127]. - Net operating income for Q1 2023 was USD 16,584 million, compared to USD 18,392 million in Q1 2022, reflecting a decline of 9.8%[119]. - The net income attributable to equity holders of the company in Q1 2023 was USD 4,962 million, compared to USD 4,710 million in Q1 2022, reflecting a 5.3% increase[92]. Production and Sales - Total equity production reached 2,130 mboe per day, a 1% increase from 2,106 mboe per day in Q1 2022, driven by new field ramp-ups[12][24]. - Equinor's gas production on the Norwegian continental shelf remained high, contributing significantly to European energy security[13][24]. - Gas production to Europe accounted for 55% of total production in the first quarter of 2023, with a slight increase in volume compared to Q1 2022[29]. - Liquids sales volumes increased by 3% to 217.3 mmbl in Q1 2023 compared to Q1 2022[77]. - Average Brent oil price decreased by 20% year-on-year to USD 81.3 per barrel, while average liquids price fell by 24% to USD 73.8 per barrel[49]. Capital Expenditures and Investments - Organic capital expenditures are estimated at USD 10-11 billion for 2023, with an average of around USD 13 billion for 2024-2026[48]. - The acquisition of BeGreen, a solar project developer, was completed, adding over 6 GW to the project pipeline[16][24]. - The acquisition of Suncor Energy UK Limited was agreed for USD 850 million, with USD 250 million contingent on a final investment decision[123]. - Additions to PP&E, intangibles, and equity accounted investments totaled USD 2,828 million in Q1 2023[118]. Dividends and Shareholder Returns - The company expects a total capital distribution of USD 17 billion for 2023, including a share buy-back program of USD 6 billion[21][22]. - The board declared an ordinary cash dividend of USD 0.30 per share and an extraordinary cash dividend of USD 0.60 per share for Q1 2023[40]. - The share buy-back program for 2023 is proposed at up to USD 6 billion, including shares to be redeemed from the Norwegian State, maintaining the State's ownership at 67%[137]. - The first tranche of the share buy-back program launched on February 7, 2023, amounted to USD 1 billion, with USD 330 million acquired in the open market[138]. Tax and Financial Ratios - The effective tax rate decreased from 72.6% in Q1 2022 to 63.8% in Q1 2023, primarily due to a lower share of income from the NCS[33]. - The effective tax rate for Q1 2023 was 63.8%, significantly influenced by lower income from the Norwegian continental shelf[131]. - The adjusted net debt to capital employed ratio improved to negative 52.3% from negative 23.9% at the end of Q4 2022[20][24]. - The net debt to capital employed ratio increased to (59.6%) in Q1 2023 from (32.6%) in Q4 2022, indicating a significant rise in leverage[180]. Cash Flow and Liquidity - Cash flows provided by operating activities in Q1 2023 amounted to USD 14,871 million, significantly higher than USD 4,267 million in Q4 2022[102]. - Cash and cash equivalents increased to USD 17,915 million as of March 31, 2023, up from USD 15,579 million at the end of 2022[96]. - The company reported a net increase in cash and cash equivalents of USD 1,809 million in Q1 2023, contrasting with a decrease of USD 8,612 million in Q4 2022[102]. - Cash flow from operations after taxes paid is used to evaluate cash generated from operating activities, but is not a measure of liquidity under IFRS[158]. Strategic Outlook - The company aims to optimize its portfolio and increase gas exports as part of its future strategy[182]. - Equinor plans to grow cash flow and returns while maintaining a focus on decarbonization and renewable energy investments[182]. - The company anticipates continued volatility in oil prices and macroeconomic conditions impacting future performance[183].