* BP, Total, Equinor Q1 profits above pre-pandemic levels
* Dividends recover but still lower than before pandemic
* Analysts expect share buybacks, investment for transition
(Adds analyst on Total, detail on Shell's dividend policy, link
to Shell earnings story)
By Shadia Nasralla
LONDON, April 29 (Reuters) - Europe's major energy companies
profited from a rise in oil prices to report big increases in
first-quarter earnings on Thursday, putting the worst of the
pandemic-driven slump in fuel demand behind them.
Last year's demand collapse forced BP, Royal Dutch
Shell and Equinor to slash their dividends
and preserve cash as they to try to transform themselves into
companies that can thrive in a low-carbon world.
With benchmark oil prices recovering from an April
2020 low of $16 a barrel to about $67 a barrel this month, most
of the companies managed to drive profits back above levels seen
before the coronavirus pandemic first struck.
BP's first-quarter headline profit figure of $2.6 billion
exceeded its first-quarter profit of $2.4 billion in 2019 and
was more than 200% higher than in 2020.
France's Total reported headline profits of $3
billion in the first three months of 2021, up 69% from last year
and 9% above the first quarter of 2019.
Norway's Equinor, meanwhile, came in with a first-quarter
profit of $5.5 billion on Thursday, also exceeding its
pre-pandemic profit of $4.2 billion.
Shell's first-quarter profit climbed 13% from last year to
$3.2 billion though that was still below 2019's $5.3
billion.
But despite recovering profits, payouts were still below
pre-pandemic levels with the exception of Total, which had kept
its dividend steady throughout the pandemic.
"(Total's) dividends are held flat but the buyback question
will now arise given the sub 20% gearing (debt-to-equity
ratio)," Bernstein analysts said.
While Shell has increased its dividend twice in the past six
months, the 17.35 cents it paid per share in the first quarter
was below the 47 cents it paid out before the pandemic.
Shell, which is set to increase its dividend by 4% next
year, has flagged share buybacks once its debt falls to $65
billion which Barclays and Bernstein say is possible this year.
Equinor also raised its payout to 15 cents per share, but
again this was short of 2019's 26 cents per share.
"The suggestion is that capital is being preserved to allow
for an acceleration of new energy investment," Citi said.
BP's 3.8 pence per share first-quarter dividend was about
half of what it paid in 2019. However, it is starting share
buybacks which analysts expect to increase in the third quarter.
"BP should be able to buy back at least $10 billion between
2021 and 2025," said analysts at Jefferies.
Spain's Repsol reported a 5.4% rise in
first-quarter adjusted net profit to 471 million euros, though
this was 24% below earnings in the first three months of 2019.
It decided in November to cut its 2021 and 2022 cash payouts
to 0.60 euro from 1 euro per share, but said share buybacks
could push returns above 1 euro per share by 2025.
(Reporting by Shadia Nasralla; Additional reporting by Nerijus
Adomaitis, Isla Binnie and Benjamin Mallet; Editing by David
Clarke and Elaine Hardcastle)