A common view of the BP emblem and petrol station forecourt signal on January 22, 2024 in Southend, United Kingdom.
John Keeble | Getty Photos Information | Getty Photos
British oil big BP on Tuesday reported stronger-than-expected web revenue for the second quarter and raised its dividend regardless of beforehand warning of considerably decrease refining margins.
The oil and fuel main posted underlying alternative price revenue, used as a proxy for web revenue, of $2.8 billion for the second quarter. That beat analyst expectations of $2.6 billion, in accordance with an LSEG-compiled consensus.
BP reported web revenue of $2.7 billion for the primary three months of the yr and $2.6 billion for the second quarter of 2023.
The power agency introduced it had elevated its dividend by 10% to eight cents per share, up from 7.27 cents. It additionally maintained the speed of its share buyback program at $1.75 billion over the following three months.
Kate Thomson, chief monetary officer at BP, mentioned Tuesday that the agency’s resolution to spice up shareholder returns “displays the arrogance we’ve got in our efficiency and outlook for money era.”
BP mentioned earlier within the month that weak refining margins and decrease oil buying and selling outcomes would probably dent the agency’s second-quarter outcomes by as a lot as $700 million. The agency on Tuesday confirmed a writedown of $1.5 billion, partly as a consequence of a plan to cut back refinery operations at its Gelsenkirchen plant in Germany.
“We’re driving focus throughout the enterprise and lowering prices, all whereas constructing momentum in our drive to 2025,” BP CEO Murray Auchincloss mentioned in a press release.
“Our current go-ahead of the Kaskida improvement within the Gulf of Mexico enterprise, and resolution to take full possession of bp Bunge Bioenergia whereas scaling again plans for brand new biofuels tasks, reveal our dedication to delivering as an easier, extra centered and better worth firm,” he added.
BP’s web debt stood at $22.6 billion on the finish of the second quarter, down from $23.7 billion in comparison with the identical interval final yr.
Shares of the London-listed firm rose 1.9% on Tuesday morning.
BP’s inventory value is down roughly 2.8% year-to-date. By comparability, shares of British rival Shell have climbed almost 8% up to now this yr, whereas shares of U.S. oil big Exxon Mobil have jumped greater than 16%.
Investor confidence
BP’s second-quarter outcomes come as the corporate seeks to rebuild investor confidence in its technique.
Analysts at RBC Capital Markets mentioned BP reported “resilient” second-quarter earnings, “with a small beat on the underside line pushed primarily by a decrease than anticipated tax fee.”
They added that BP’s dividend bump got here in on the prime finish of market expectations, whereas the discount in web debt “needs to be welcomed” on condition that rising web debt had been seen as a difficulty for BP’s funding case.
In current months, BP has come underneath strain from activist investor Bluebell Capital Companions to ramp up its oil and fuel investments and cut back on inexperienced pledges.
Underneath the management of Bernard Looney, who resigned in September after lower than 4 years on the job, BP had promised that its general emissions could be 35% to 40% decrease by the top of the last decade.
The agency, which was one of many first power giants to announce plans to chop emissions to web zero “by 2050 or sooner,” has since watered down these local weather plans. BP mentioned in a method replace final yr that it will as an alternative goal a 20% to 30% lower, noting that it wanted to maintain investing in oil and fuel to fulfill demand.
Reuters reported in late June that BP CEO Murray Auchincloss had imposed a hiring freeze and paused renewables tasks as a part of a cost-cutting plan to spice up returns. BP mentioned on the time that Auchincloss had launched six priorities “to ship as an easier, extra centered and better worth firm.”
Shell is scheduled to report second-quarter outcomes on Thursday, with Exxon Mobil and Chevron each poised to observe go well with on Friday.
Norwegian oil and fuel producer Equinor on Wednesday reported a 4% drop in second-quarter earnings, outperforming analyst expectations.
