Norwegian energy giant doubles quarterly profit, balancing high taxes with shareholder returns

⑴ Norwegian energy company Equinor reported adjusted operating profit of $12.35 billion in the third quarter, nearly doubling from $6.2 billion in the same period last year and marking its best quarterly performance since late 2022. ⑵ The growth in performance was mainly driven by European natural gas prices rising from $11.4 to $20.0 per million BTU, and liquid product prices increasing from $64.9 to $92.3 per barrel. ⑶ Production increased by 2% year-on-year to 2.17 million barrels of oil equivalent per day. The 2026 growth guidance was raised from 3% to approximately 4%, and the Mongstad refinery recorded a record performance due to high refinery margins. ⑷ However, of the $12.35 billion profit, only $2.86 billion remained after tax, as the marginal tax rate on the Norwegian continental shelf is as high as 78%. This quarter, Equinor paid $6.2 billion in Norwegian taxes in installments alone. ⑸ The Norwegian government holds a 67% stake in Equinor, benefiting both as a taxpayer and as a shareholder, which is also the reason why, despite doubling profits, adjusted earnings per share of $1.20 still fell short of expectations. ⑹ Regarding shareholder returns, the dividend per share is $0.39. In 2026, a $3 billion share repurchase program will be launched, with the final $1.125 billion tranche starting the next day. The net debt-to-capital ratio fell from 10.4% in the previous quarter to 3.8%. ⑺ On the transaction front, Equinor sold a 30% stake in the Bay du Nord project in Canada to Shell. ⑻ Geopolitically, conflicts related to Iran continue to fuel market concerns, and Europe’s energy import cost pressures persist. ⑼ The company's share price has risen 86% year-to-date, but the majority of cash flow ultimately goes to the Norwegian government, leaving investors with a relatively limited share.