“We had a record year in 2004, with a net income of NOK 24.9 billion,” says chief executive Helge Lund. “This represents an increase of more than 50 per cent from the year before and is the best result we’ve ever achieved.”
The 2004 results are being presented at a press conference in Oslo today.
In addition to a very good performance for the full year and the fourth quarter, Statoil can report competitive profitability with a return on average capital employed (ROACE) of 23.5 per cent. That corresponds to 12.3 per cent under normalised market conditions.
“I’m pleased that the normalised ROACE exceeded our target of 12.0 per cent,” says Mr Lund. “Our industrial and financial position has been greatly strengthened since the stock market listing in 2001.
“Both the scorecard and the improvement programme have been important tools and a substantial driving force in improving our profitability.”
An average output of 1 106 000 barrels of oil equivalent (boe) per day during 2004 was marginally below the production target for the year.
Combined with the effects of the high oil and gas prices, this has contributed to pushing up unit costs for discoveries and production on certain fields.
Cost and income improvements identified at 31 December 2004 contributed NOK 3.2 billion to the group’s annual income before financial items.
The improvement programme target was NOK 3.5 billion compared with 2001. The difference primarily reflects rather lower output growth and higher unit production costs than expected in the international business since 2001.
“Although the results are good, we must get even better,” says Mr Lund. “We have accordingly initiated new and important improvement programmes and set ambitious new targets. Ambitions for 2007 are the next objective we must strive towards.”
The 2007 target is a normalised ROACE of 13 per cent and an average daily oil and gas output of 1.4 million barrels. That calls for an average annual production growth of eight per cent over the next three years.
“This is a powerful combination of profitability and growth which distinguishes us from the industry average,” comments Mr Lund.
He emphasises that the Statoil organisation’s expertise and drive have contributed to the strong position occupied by the group at the beginning of 2005.
A big portfolio of projects, both in Norway and internationally, and good strategic positions will provide the basis for continued development and growth.
Statoil also found 2004 a good year in terms of replacing reserves. Its reserve replacement rate was 106, giving an average rate for the past three years of 101 per cent compared with a target of 100 per cent.
The group’s financial position is robust, and the board will propose to the annual general meeting that a total dividend of NOK 5.30 per share be paid for 2004, including NOK 2.10 as an extraordinary payment.