By Shadia Nasralla
LONDON (Reuters) – Europe’s main vitality firms profited from an increase in oil costs to report large will increase in first-quarter earnings on Thursday, placing the worst of the pandemic period stoop in gas demand behind them.
Final yr’s demand collapse pressured BP (NYSE:), Royal Dutch Shell (LON:) and Equinor to slash their dividends and protect money as they to attempt to rework themselves into firms that may thrive in a low-carbon world.
With benchmark oil costs recovering from an April 2020 low of $16 a barrel to about $67 a barrel this month, many of the firms managed to drive earnings again above ranges seen earlier than the coronavirus pandemic first struck.
BP’s first-quarter headline revenue determine of $2.6 billion exceeded its first-quarter revenue of $2.4 billion in 2019 and was greater than 200% larger than in 2020.
France’s Complete reported headline earnings of $3 billion within the first three months of 2021, up 69% from final yr and 9% above the primary quarter of 2019.
Norway’s Equinor, in the meantime, got here in with a first-quarter revenue of $5.5 billion on Thursday, additionally exceeding its pre-pandemic revenue of $4.2 billion.
Shell’s first-quarter revenue climbed 13% from final yr to $3.2 billion although that was nonetheless beneath 2019’s $5.3 billion.
However regardless of recovering earnings, payouts had been nonetheless beneath pre-pandemic ranges except Complete, which had stored its dividend regular all through the pandemic.
Whereas Shell has elevated its dividend twice up to now six months, the 17.35 cents it paid per share within the first quarter was beneath the 47 cents it paid out earlier than the pandemic.
Equinor additionally raised its payout to fifteen cents per share, however once more this was wanting 2019’s 26 cents per share.
“The suggestion is that capital is being preserved to permit for an acceleration of recent vitality funding,” Citi mentioned.
BP’s 3.8 pence per share first-quarter dividend was about half of what it paid in 2019. Nevertheless, it’s beginning share buybacks which analysts anticipate to extend within the third quarter.
“BP ought to be capable to purchase again no less than $10 billion between 2021 and 2025,” mentioned analysts at Jefferies (NYSE:).
Spain’s Repsol (OTC:) reported a 5.4% rise in first-quarter adjusted web revenue to 471 million euros, although this was 24% beneath earnings within the first three months of 2019.
It reduce its 2021 and 2022 money payouts to 0.60 euro from 1 euro per share, however mentioned share buybacks may push returns above 1 euro per share by 2025.
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