July 28, 2015 / 8:45 AM / 5 years ago

UPDATE 4-Statoil profit beats forecast; reassures on dividend

* Norway production, refineries boost result

* Reassures with same dividend level into Q4

* Fails to break even in international operations (Adds Statoil’s clarification on Q4 dividend)

By Stine Jacobsen and Sabina Zawadzki

OSLO, July 28 (Reuters) - Norway’s Statoil posted higher than expected second-quarter profit, helped by its refining and North Sea oil businesses, and maintained its quarterly dividend at the same level, despite weak oil prices.

Shares in the state-controlled oil major rose as much as 4.2 percent on Tuesday after it bounced back from a surprise first-quarter net loss. It trimmed its capital expenditure target for this year, but kept other forecasts.

“Statoil’s results prove once again just how resilient its business model actually is. Despite macro fears, Statoil is sailing through with strong operating performance and visible management response on costs,” said Bernstein analysts, who have an “outperform” rating on the company’s shares.

As part of converting its financial reporting to U.S. dollars from Norwegian crowns, Statoil said it would pay a dividend for the second quarter of 22.01 cents a share, in line with the 1.8 crowns expected.

Statoil only began paying quarterly dividends this year, prompting investors to question whether it would continue doing so as persistently low oil prices batter the industry.

Chief Financial Officer Torgrim Reitan said the same level of dividend would be paid out in the fourth quarter although the company later distanced itself from those comments.

“It’s very important that we don’t create any uncertainty here so the second-quarter dividend is 22.01 cents per share and the intention is that that is the same for the third quarter and the fourth quarter,” Chief Financial Officer Torgrim Reitan said on a conference call when pressed about the dividend policy.

Statoil head of media, Jannik Lindbaek, later said the fourth quarter dividend would be decided by the board next year and that the company’s current dividend policy which outlines the payments for only the first three quarters, still stands.

Second-quarter adjusted operating profit was 22.4 billion crowns ($2.7 billion), down from 32.3 billion a year ago but above a forecast of 19.5 billion in a Reuters poll of analysts. Adjusted net profit was 7.2 billion, beating expectations of 5.6 billion.

In contrast, British oil major BP missed second-quarter profit forecasts on Tuesday after taking a charge related to the settlement of the 2010 Gulf of Mexico spill.

Like a few other oil companies such as BP and Exxon, Statoil owns oil refineries which perform well when oil prices are down and help offset lower revenues from crude sales.

Statoil also improved production, with a 7 percent increase in its main Norwegian business leading it to make a profit of 18 billion crowns there. However, its international business failed to break even, with production flat.

Statoil benefits from Norway’s unusual supervision of the industry, which includes giving licences for free and big subsidies for exploration and development though once extracting oil, companies pay the world’s highest tax rate.

Its shares were up 2 percent by 1405 GMT, beating a 0.57 percent rise in Oslo’s benchmark index. The shares have fallen 14.8 percent in the last three months, in line with the European oil and gas index, to trade at six-month lows.

$1 = 8.1618 Norwegian crowns Additional reporting by Ole Petter Skonnord; Editing by Mark Potter and William Hardy

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below