Equinor has cut its quarterly cash dividend for the first quarter of the year by 67% compared to the previous year (Q4 2019) in response to the current unprecedented market conditions.
The board of directors of the company decided on a cash dividend of $0.09 per share for the last three-month period.
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According to Equinor, the decision was taken considering various factors, including expected cash flow, capital expenditure plans, and flexibility during the Covid-19 pandemic.
The dividend reduction is the latest measure to be enacted by Equinor as it struggles to cope with the financial implications of the market hit by coronavirus, including the suspension of its $5bn share buyback programme, which was announced last month.
Equinor has also launched a cost-reduction plan, which includes $3bn in capital spending cuts and lower operating and exploration costs, as well as a $5bn bond issuance.
Equinor president and CEO Eldar Sætre said: “Equinor has already taken forceful actions to strengthen our liquidity and financial resilience under the current circumstances.
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By GlobalData“In this extraordinary market situation, we have now also decided to reduce the cash dividend for the first quarter 2020 by 67%, compared to the proposed fourth quarter 2019 dividend.”
The company hopes that, with an average oil price of $25 per barrel for the rest of this year, these actions will help it to achieve cash flow neutrality by the year-end.
Last December, Equinor completed the previously announced sale of its onshore business in the Eagle Ford, Texas, US, to Spanish energy company Repsol for $325m.
In October last year, Petrobras signed a memorandum of understanding (MoU) with Equinor to focus on the development of natural gas business projects.
