In addition to low crude oil prices, the first quarter net income was influenced by currency effects and an unusually high effective tax rate. In the first quarter of 2009, net income was NOK 4.0 billion compared to NOK 16.0 billion in the same quarter a year ago.
A new functional currency in the parent company has introduced reduced currency effects on net financial income. While taxes payable are unaffected by this change, taxable income exceeded consolidated accounting income before tax by approximately NOK 10 billion, thus contributing to a tax rate of 87.4%. Adjusted for this difference, the tax rate amounted to 66.4%.
“Recession and uncertainty in the world economy is continuing to impact energy demand and energy prices. Facing the turmoil, we are continuing to pursue further cost reductions, increased efficiency and operational improvements,” says StatoilHydro’s chief executive Helge Lund.
Noting that the first quarter result was strongly influenced by low crude oil prices, currency effects and unusual income tax effects due to the new functional currency, the chief executive emphasises that operations and production have been satisfactory:
“We delivered record production and reliable operations during the first months of the year. The start-up of new fields like the Tahiti field in the US Gulf of Mexico and Alve on the Norwegian continental shelf (NCS) are recent milestones underpinning our long term growth strategy.”
“Our long-term strategy remains firm. We have strengthened our portfolio of exploration acreage in Norway and the US Gulf of Mexico and we have maintained high exploration activity, with good results. We have also strengthened our position within renewable energy through the sanctioning of the Sheringham Shoal offshore wind farm in the United Kingdom,” says Mr Lund.
Total equity production of liquids and gas in the first quarter of 2009 was 2.074 million barrels of oil equivalent per day, up 1% from the first quarter of 2008.
Adjusted for certain items that may not be specifically related to StatoilHydro’s underlying operational performance in the individual reporting period, adjusted earnings in the first quarter of 2009 were NOK 36.0 billion, compared to NOK 51.5 billion in the first quarter of 2008. The decrease in adjusted earnings was mainly due to lower liquids prices, only partly offset by higher income from natural gas sales.