Tag Archives: Chief executive officer

Norway' Oil Giant Disappoint Investors

Norway’s corporate crown jewel, Statoil ASA, who weights almost 30% of the Oslo Stock Exchange Benchmark Index, reports a net operating income of NOK 26,6 billion in second quarter of 2010. More than in Q2 last year, but substantial lower than investors estimates of NOK 38,2 billion. The Statoil shares are tumbling, dragging the rest of the market down with it.

“Statoil’s second quarter is characterized by strong operational performance and a high activity level.”

Helge Lund

Helge Lund, CEO, Statoil ASA.

At the moment Statoil (STL) is down 2,74%, while the Oslo Benchmark Index is struggling to keep itself above the zero line. Today’s report comes out weaker than expected, and Statoil’s management warns of an even worse third quarter.

Statoil’s second quarter 2010 net operating income was NOK 26.6 billion, compared to NOK 24.3 billion in the second quarter of 2009, Statoil reports.

The quarterly result was affected by a 32% increase in liquids prices measured in NOK, a 6% increase in equity production and a 12% decrease in gas prices measured in NOK.

Also impairments, loss on derivatives and a provision for an onerous contract influenced net operating income.

Adjusted earnings in the second quarter 2010 were NOK 36.4 billion, up 25% from second quarter 2009 when adjusted earnings were NO K 29.2 billion.

Net income in the second quarter of 2010 was NOK 3.1 billion. This result reflects higher oil prices and increased liftings, lower net financial losses and lower tax rates partly offset by lower gas prices, impairments, losses on derivatives and an onerous contract compared to the second quarter of 2009, when net income was zero and the tax rate unusually high.

Adjusted earnings after tax were NOK 10.6 billion in the second quarter of 2010, up 21% from second quarter 2009 when adjusted earnings after tax were NOK 8.8 billion.

Adjusted earnings after tax excludes the effect of financial items and the tax on net financial items, and represents an effective adjusted tax rate of 71% in the second quarter of 2010 and 70% in the second quarter of 2009.

Warns of Q3

“Statoil’s second quarter is characterised by strong operational performance and a high activity level,” Statoil’s Chief Executive Officer, Helge Lund, says in the press release.

“We are making good progress on important projects. The Gjøa production platform is now anchored at the field in the North Sea. The Gudrun development was approved by the Norwegian Parliament in June, and key contracts have now been awarded. In Brazil, the Peregrino field development is moving forward and we have agreed to bring in Sinochem as a 40% partner in the project,” says Lund.

“Statoil’s production is on track. Equity production is up 6% compared to second quarter last year. However, planned maintenance turnarounds will heavily impact production in the third quarter,” says Statoil’s CEO Helge Lund.

The Key Figures

Click to enlarge

Disappointments

However, investors are not satisfied with the number.

Net profit was NOK 3.1 billion in the quarter, up from zero in the corresponding quarter last year. Like last year’s quarter, net income in this year’s second quarter is negatively impacted by a high tax rate.

Statoil believes that the tax rate of 88.2 percent in the second quarter does not reflect the company’s underlying tax exposure, according to TDN Finans.

Operating profit in the second quarter was negatively impacted by NOK 3.0 billion in writedowns, mostly related to the onshore Mongstad project, under-lifted by NOK 0.6 billion, a inventory effect of 0.1 million, lower value of derivatives of 1.5 billion, and other provisions 4.6 million – in where  NOK 3.8 billion are related to a contract loss of a natural gas reception facilities in the United States.

Statoil maintain their production guiding for 2011, but makes a downwards adjustment for 2012 to 2,06 – 2, 16 million barrels a day, from  2,1 – 2,2 million barrels. The decline is due to the sale of a 40% stake in the Peregrino field offshore Brazil.

Shares Drop

At Oslo Stock Exchange the Statoil shares dropped almost 3% when the Q2 report was released, at the moment Statoil (STL) is down 2,74%.

Statoil being the largest Norwegian corporation weights almost 30% in the Oslo Benchmark Index, and the drop in share prices are dragging the whole market down.

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Here’s a copy of the full press release.

Here’s the full Q2 report.

Here’s the presentation material, graphic, etc., from the analysts conference by CFO Eldar Sætre.

Related by the Econotwist:

Statoil May Buy BP Assets, Expert Says

Fears Of Oil Spill Consequences Subside, CDS Spreads Show

EU To Seek Temporary Ban On Deep-Water Oil Permits

Norway’s Oil Fund Among BP’s Largest Shareholders As Bankruptcy Rumors Hit Market

Norway’s Foggy Outlook

Norway At The End Of An Era

Fitch Warns Of New Speculative Oil Spike

Norway Economic Update – “Partly Grim”

På lånt tid

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Hydro Q2 Earnings: Yes, We Can!

The worlds second largest aluminium producer, Norsk Hydro, beats estimates with its Q2 results, due to higher prices and increased sale. But CEO Svein Richard Brandtzæg warns that the second quarter may be the peak of this years earnings season.

“Full output at Qatalum and closing of the takeover of Vale’s aluminium business are expected in the fourth quarter. Combined, these moves will strengthen Hydro in all parts of the value chain

Svein Richard Brantzæg

“The solid results are attributable to higher sales volumes, combined with firm margins and tight cost control in a seasonally strong quarter. This quarter confirms Hydro as a strong market performer,” Hydro’s President and Chief Executive Officer Svein Richard Brandtzæg says in a market statement.

Hydro had underlying earnings before financial items and tax of NOK 1,110 million in the second quarter, rising from NOK 688 million in the first quarter.

Consensus estimates was 995 million, according to TDN Finans.

Svein Richard Brandtzæg

Higher realized aluminium prices, continued improvements in alumina operations and higher downstream sales lifted underlying results for the quarter.

Underlying results for Primary Metal improved during the quarter compared to the first quarter, due to higher realized aluminium prices.

Hydro’s alumina and raw materials business showed improved underlying results, mainly due to the Alunorte alumina refinery which posted higher sales volumes as a result of more stable production. Variable costs increased for Hydro’s smelter operations during the quarter.

“Full output at Qatalum and closing of the takeover of Vale’s aluminium business are expected in the fourth quarter. Combined, these moves will strengthen Hydro in all parts of the value chain and make us an even more robust player in an industry poised for growth,” Brandtzæg says.

Key figures:

Click to enlarge

Expects Decline In Prices

However, at the investors presentation the Hydro-boss said that the Q2 earnings may turn out to be the best quarterly report this year.

Brandtzæg notes that it expected lower realized alumina prices to a lower price on the London Metal Exchange (LME), and higher raw material costs due to a temporal lag in the calculation of bauxite, which is partly linked to LME prices.

In addition, expected a decline in the performance of the commercial alumina operations in the second half of 2010 compared to the first half. The decrease is due to expectation of lower margins.

Click to enlarge

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At the Oslo Stock Exchange, the Hydro shares jumped almost 1% after the report was published, but fell back after Mr.Brandtzæg’s conference with the investors.

NHY is up 0,14%  at the moment, while the Oslo Stock Exchange Benchmark Index is up 0,24%.

Here’s a copy of Hydro’s Q2 report.

Here’s Mr. Brandtzæg’s presentation material.

Related by the Econotwist:

Hydro Issue Risk Warning In Vale Takeover Deal

Norsk Hydro To Take Over Vale S.A’s Aluminium Businesses

Hydro Trash Estimates

Global Bonus Noise

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All Nordic Banks Will Pass Stress Test, Nordea Says

According to Chief Executive,  Christian Clausen, at the Swedish based Nordea, all Nordic banks will pass the EU bank stress test when the results are made – partly – public on Friday.

“We do not see any problems related to the passing stress tests.”

Christian Clausen

Christian Clausen, CEO, Nordea Bank, Sweden.

Of course not! Nordic bankers usually don’t see any problems at all – ever. And why should they? Most of them have their local governments as major shareholders, and no politician will let their good buddies, former and future employers, down.

The Nordic central banks have even agreed on bailing out the Baltic banks, who have caused the Scandinavian bankers most headache, and losses, so far.

Nordic Central Banks Agree On Baltic Bank Bailout

At the Nordea headquarter they’re also absolutely sure that the tests would strengthen rather than weaken the Nordic banks – in any case.

“We do not see any problems related to the passing stress tests,” Nordea Chief Executive Christian Clausen says in an interview with  Bloomberg Television on Wednesday.

Adding that all the Nordic banks will come out on the upside of the stress tests.

See the interview with Christian Clausen at Bloomberg Television here, where he also talks about the Scandinavian banks Baltic operations.

When similar tests were conducted by the US bank regulators last year, 19 banks were exposed to a hypothetical horror scenario.

The US stress tests uncovered by some banks need more cash, but that most did fine, and bank shares rose sharply in a  period following the stress tests.

Europe leaders are hoping for something of the same effect, but lately many have expressed skepticism about both the health of the European banks,  and how transparent and accurate the tests are.

The following Nordic banks are included in the EU stress tests:

Denmark:

Danske Bank

Jyske Bank

Sydbank

Finland:

OP-Pohjola Group

Sweden:

Nordea Bank

Skandinaviska Enskilda Banken (SEB)

Svenska Handelsbanken

Swedbank

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No Norwegian banks are submitted to the test, as Norway is not a member of the EU.

Guess that’s just as well:

Norway: Most Banks Fail In Stresstest

More related by the Econotwist:

European Bank Stress Tests Are Loosing Credibility

The EU Stress Test: Working The Media

Stress Level Rising In Europe; Some Banks Might Not Survive

EU Stress Test May Trigger Capital Injection Of EUR 85 Billion

European Banks Hunting For EUR 1,65 Trillion

German Banks With More Than 200 Billion Euro In Faul Credits

Swedbank To Merge Baltic Subsidiaries Into The Group

Estonia: Banks Lost USD 23 million in Q1

Morgan Stanley To Buy Bad Baltic Loans?

Swedbank Leaves The State Guarantee Program

Latvia To Split And Sell Nations Leading Bank

The Nordic Superbank Dream

An Estonian Mystery

Swedbank Buy Greek Bonds With Estonian Money

Estonian Company Claims $130mill from SEB

How To Make A Rat Look Like A Puppy

Swedbank In Estonia: “Daylight Robbery”

Swedbank Reports Record Loss of SEK 10,5bn

Baltic losses of Swedish banks at 3.7 billion dollars

How Sweden sent Estonian economy into free fall

East European banks needs $304bn

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