Equinor ASA (NYSE:EQNR) Q1 2024 Earnings Call Transcript April 25, 2024
Equinor ASA beats earnings expectations. Reported EPS is $0.96, expectations were $0.78. Equinor ASA isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Ladies and gentlemen, thank you for standing by. Welcome, everyone, to the Equinor Analyst Call for Q1. At this time, all lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to hand the call over to Mr. Bard Glad Pedersen, Senior Vice President and Head of Investor Relations. You may begin your conference.
Bard Pedersen : Thank you, operator, and good morning to you all. My name is Bard Glad Pedersen, and I’m heading up Investor Relations in Equinor. As usual, I’m here together with Torgrim Reitan, our CFO. Torgrim will take you through our results first before we open for the Q&A, and we will keep this within one hour. So with that, I hand it to you, Torgrim.
Torgrim Reitan : Okay, so thank you very much, Bard, and good morning. And thank you all for joining us. I hope you all are doing well and are being well since we last met in February. So let’s dive straight into the results. Today, we delivered solid financial results driven by strong operational performance and production in a quarter with increasing liquids prices, but lower gas prices than we saw last year. The solid results are also supported by MMP coming in above the guided range. From this quarter, we have introduced adjusted net income and adjusted earnings per share as new performance measures. We also renamed some measures to better align with industry practice, and we no longer adjust for over and under lift. In the quarter, we report adjusted operating income of $7.5 billion before tax and a net income of $2.7 billion.
We deliver solid cash flow from operations of $9.7 billion and $5.8 billion after-tax, and earnings per share were 96 cents. We continue to make strategic progress across the portfolio. Earlier this year, we were awarded 39 new production licenses on the Norwegian continental shelf. We know that area well, and we are confident that we will make new discoveries. We are cutting emissions while we invest, and recently the Sleipner and Gudrun fields on the NCS were connected to power from shore. We reduced CO2 by 160,000 tons per year, and that will lead to around $27 million in reduced OpEx on an annual basis. We recently announced high grading of a U.S. onshore gas position through a transaction with EQT. We will swap our operatorship and interest in Ohio for non-operated interests in the Northern Marcellus Shale in Pennsylvania with lower breakeven and lower emissions, and also leading to increased production and profitability.
Within renewables, we remain value-focused and disciplined. As you have seen in the recent Norwegian offshore wind auction Sorlige Nordsjo II, in that auction we participated, but we stopped at a bid level that would have created value. And we were okay not to win. Value creation is and will be our top priority. 2024 is the year of de-risking for Empire Wind 1 project in New York, and we are progressing. After CMU, we were awarded a new off-take agreement with significantly better terms. Next, we aim to take an investment decision and secure project financing later this year. And with a new contract and project financing, we expect a nominal equity return between 12% and 16% for our U.S. East Coast offshore wind portfolio. From there, we also aim to farm down and bring in a new partner, which will significantly reduce our CapEx. We continue with strong capital distribution, in line with what we communicated at our Capital Markets Update in February.
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