A basic view of the BP brand and petrol station forecourt signal on January 22, 2024 in Southend, United Kingdom.
John Keeble | Getty Photographs Information | Getty Photographs
British oil big BP on Tuesday reported stronger-than-expected internet revenue for the second quarter and raised its dividend regardless of beforehand warning of considerably decrease refining margins.
The oil and gasoline main posted underlying substitute price revenue, used as a proxy for internet revenue, of $2.8 billion for the second quarter. That beat analyst expectations of $2.6 billion, in response to an LSEG-compiled consensus.
BP reported internet revenue of $2.7 billion for the primary three months of the 12 months and $2.6 billion for the second quarter of 2023.
The vitality 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 subsequent three months.
Kate Thomson, chief monetary officer at BP, mentioned Tuesday that the agency’s choice to spice up shareholder returns “displays the boldness we have now 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 doubtless 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 resulting from a plan to reduce refinery operations at its Gelsenkirchen plant in Germany.
“We’re driving focus throughout the enterprise and decreasing 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 choice to take full possession of bp Bunge Bioenergia whereas scaling again plans for brand spanking new biofuels initiatives, display our dedication to delivering as an easier, extra centered and better worth firm,” he added.
BP’s internet 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 12 months.
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% thus far this 12 months, 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 price.”
They added that BP’s dividend bump got here in on the high finish of market expectations, whereas the discount in internet debt “must be welcomed” on condition that rising internet 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 gasoline investments and reduce on inexperienced pledges.
Below 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 tip of the last decade.
The agency, which was one of many first vitality giants to announce plans to chop emissions to internet zero “by 2050 or sooner,” has since watered down these local weather plans. BP mentioned in a method replace final 12 months that it will as a substitute goal a 20% to 30% minimize, noting that it wanted to maintain investing in oil and gasoline to satisfy demand.
Reuters reported in late June that BP CEO Murray Auchincloss had imposed a hiring freeze and paused renewables initiatives 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 comply with swimsuit on Friday.
Norwegian oil and gasoline producer Equinor on Wednesday reported a 4% drop in second-quarter income, outperforming analyst expectations.
