Equinor reported a 4% decline in second-quarter profits year-on-year, attributed to falling natural gas prices. The Norwegian oil and gas producer’s adjusted earnings before tax for April to June fell to $7.48 billion, down from $7.80 billion a year earlier, yet still surpassed analysts’ expectations of $6.96 billion based on a poll of 22 analysts.
CEO Anders Opedal highlighted the company’s strong operational performance throughout the quarter. Equinor noted that the realized European piped gas price decreased due to milder temperatures and lower market prices, influenced by high storage levels and reduced demand. The Dutch TTF front-month gas contract, Europe’s benchmark, averaged 31.76 euros per megawatt hour (MWh) in the second quarter, down from 34.86 euros/MWh a year earlier.
The company also revised its renewable energy production growth forecast for 2024, reducing it to 70% from a previously predicted doubling, mainly due to delays in the start-up of the 1.2 GW Dogger Bank A offshore wind farm in the UK, now expected to begin in 2025 instead of late 2024.
Equinor maintained its projection for oil and gas output to remain unchanged in 2024 compared to 2023 and kept its capital expenditure forecast at $13 billion for the year. In Q2, the company produced 2.05 million barrels of oil equivalent per day (mboed), slightly exceeding analyst expectations of 2.03 mboed and up from 1.99 mboed a year ago.
Following Russia’s invasion of Ukraine, Equinor became Europe’s largest supplier of natural gas, surpassing Gazprom. However, Equinor’s share price has declined by 10.4% this year, while the broader index of major European energy stocks has risen by 1%.