Stock market giant Equinor sent Oslo Børs down sharply on Wednesday.
Photo: Erik Flaaris Johansen / NTBPublisert:
Today 09:00
Updated just now
The stock exchange has been down from the start on the third trading day of the week. At closing time, the Main Index is down 2.05 per cent.
This is how it went for a bunch of the most traded shares:
- Equinor fell 7.76 percent
- Storebrand ended down 3.74 percent
- Frontline fell 1.99 percent
- DNB ended down 1.27 percent
- Telenor rose 1.62 percent
Equinor fell heavily after the quarterly report and ended with its worst trading day since March 2020.
Today’s share fall shaves off more than NOK 70 billion from Equinor’s stock market value.
North Sea oil (burnt spot) is trading at the time of writing for $78.87 a barrel, a slight rise since midnight.
“Below expectations”
Equinor posted adjusted pre-tax operating profit of $8.68 billion in the fourth quarter of 2023, down from $17.14 billion in the same quarter in the record year of 2022, according to its latest quarterly report. In advance, 26 analysts on average had expected an adjusted result of 8.46 billion dollars, according to figures Equinor itself had collected.
The company expects that it will pay dividends and buy back shares for 14 billion dollars (about 148 billion kroner) in 2024. This is down from about 17 billion dollars in 2023.
Analyst Vidar Lyngvær at Danske Bank considers that the distribution to shareholders was “below expectations”, but believes that expectations in the market have come down in the last couple of weeks.
“The results were strong and the guidance was as expected, while the distribution to shareholders was cut and there was no significant weakening of the renewable targets,” he writes.
The Equinor share fell 7.76 percent.
Analyst: That’s why the stock is falling
Analyst Tom Erik Kristiansen at Pareto Securities points to several reasons for the share fall.
– The share is weakly driven by higher than expected investments going forward and continued willingness to put more money into renewables with low returns, he says to E24.
– European companies such as Shell and BP have sharply reduced their investments, the market is punishing Equinor for not doing the same given the challenges the industry is now experiencing with relatively low profitability.
Equinor reports that “expected total capital distribution”, which includes dividends and buybacks of its own shares, is $14 billion in 2024. This is down from $17 billion last year.
– The yield is good and higher than expected. But with higher investments, the company’s cash flow comes under pressure and then the dividend capacity will also fall going forward, says Kristiansen.
– Equinor is also highly priced compared to peers in Europe. With a weaker gas market, there are few reasons to buy Equinor on a relative basis, he says.
Rec Silicon is shutting down part of its production facilities
Rec Silicon is shutting down polysilicon production at its facility in Butte, Montana, USA. The facility in Montana is one of Rec Silicon’s two manufacturing plants.
The closure is primarily due to an imbalance between supply and demand for electricity in the region, it is stated.
Polysilicon production will continue for six to nine months due to commitments to customers.
Rec Silicon will maintain the silicon gases business at the Montana facility.
The share ended down 2.76 percent.
The Schibsted manager is stepping down
The media group presented results in the morning hours, and at the same time came with more news.
Kristin Skogen Lund resigns as chief executive of Schibsted. She continues until a successor is in place. Skogen Lund says it is natural that she will leave when the company is split in two.
In December, it was announced that Schibsted will split in two. The media and newspaper business, called News Media, is to be sold to the company’s largest shareholder, Stiftelsen Tinius.
Schibsted also announces that they will withdraw from Viaplay. In the autumn, Schibsted surprised by buying 10.1 per cent of the crisis-stricken company.
The financial figures for the fourth quarter showed a gross operating profit (ebitda) of NOK 684 million, which was somewhat better than expected. Turnover for the quarter ended at NOK 4.082 billion, roughly as expected.
The Schibsted share rose 4.09 percent.
Lower than expected from Storebrand
Storebrand had an operating profit of NOK 600 million, while analysts expected it to be NOK 766.6 million, according to consensus estimates obtained by Bloomberg.
Storebrand had a solvency margin of 192 per cent for the quarter. In advance, 200 percent was expected.
The share fell 4.54 percent.
Telenor will pay a dividend
There have been several updates from companies in the hours before the stock market opens on Wednesday. Among other things, we find:
- Telenor proposes a dividend to its shareholders of NOK 9.5 per share for 2023, a total of NOK 13.3 billion. It is in line with expectations and up from NOK 9.40 last year. The company reports a turnover of NOK 20.93 billion in the fourth quarter of 2023, up from NOK 19.67 billion at the same time last year. The share rose 1.62 percent.
- Flex LNG lags experienced a drop in profit in the fourth quarter of 2024. The profit after tax ended up at USD 19.4 million, compared to USD 41.4 million in the same period the previous year. The Flex share fell 5.61 percent.
- 2020 Bulkers’ profit after tax landed at 14.8 million dollars, against 6.7 million dollars in the same period the previous year. The share rose 1.03 percent.
- Norse carried 65,116 passengers in January. The share fell 4.72 percent.
E24 is a wholly owned subsidiary of the Schibsted group. Certain journalists in E24 own shares in Schibsted through the group’s share savings programme.