Statoil's record earnings disappoint market

Norwegian energy group Statoil followed bigger oil and gas rivals in reporting record 2004 earnings yesterday, although fourth-quarter results slightly lagged market expectations.

Statoil, which employs about 1,000 people in the Republic, posted earnings of 18.75 billion Norwegian crowns (€2.2 billion) for the final quarter of last year, up from 12.65 billion crowns a year earlier.

The results missed analysts' average expectation of 19.72 billion crowns but was within the range of forecasts for the Nordic region's biggest industrial company.

"It was a little disappointing on the operating side," said DnB NOR Markets analyst Mr Björn Inge Tönnesen. He cited a lower-than-expected achieved oil price in the group's international operations as a key reason for the undershoot.

Statoil did not break out results for its operations in the Republic, which include 300 service stations, a home-heating business and a share in the Corrib gas field.

The petrol and diesel industry in the Republic has been shaken up over the past year with the increased penetration by Tesco's low-cost offering.

A spokeswoman for Statoil acknowledged that it had been "a difficult year for the oil industry".

She went on to reaffirm Statoil's commitment to the Irish market. "It is business as usual for 2005," she said.

Statoil said in November that it was seeking voluntary redundancies across its Irish distribution, development and head-office personnel. There were fears at that stage that the firm was looking at relocating the management of its Irish operations but the idea was rejected by senior management.

Competitors linked the redundancies to tightening margins and increased competition. Margins came under pressure in the State as oil prices rose but suppliers suffered a lag before passing the cost on to customers.

Statoil, which is 76 per cent owned by the Norwegian state, cheered investors yesterday with its dividend. The firm proposed to pay 5.3 crowns per share. - (Additional reporting, Reuters)