By Kjetil Malkenes Hovland
OSLO-- Statoil ASA, the Norwegian oil company, has justified its
decision to report quarterly earnings in dollars instead of local
kroner from next year by the need to make its results more
predictable in an industry dominated by dollar transactions.
One Statoil shareholder, however, stands to face more
unpredictable yields from the oil firm: the Norwegian
government.
With a 67% interest in the company, the government is on the
receiving end of billions of kroner in Statoil dividends every
year. This year, its share of the payout is expected to exceed 15
billion kroner, or nearly $2 billion.
When Statoil starts to calculate its annual dividend in dollars,
the amount ending in the government's pocket may fluctuate sharply,
depending on the value of the Norwegian krone.
If the krone, which trades at 8.15 to the dollar, returned to
its 20-year average of 6.80, it would shave off roughly 15% of the
government's windfall. But should the krone continue to slide
against the dollar, the government would receive a bigger check
from Statoil.
The Norwegian government said that Statoil had informed
authorities about its decision to shift to the dollar, adding that
the company was free to decide which currency it wanted to report
its results.
The switch, announced earlier this week, was hailed by analysts,
who said that it made sense since most of the company's revenue,
costs, and debts are denominated in dollars.
Statoil has set its second-quarter dividend in both dollars and
kroner, at $0.2201 per share and 1.80 kroner per share, unchanged
from previous quarters, but said third-quarter dividend will be
announced solely in dollars.
The krone has weakened more than 20% against the dollar in the
past year and is trading a near 13-year low, as plunging global oil
prices have curbed economic growth prospects in the oil-focused
Nordic country.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
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