A general view of the BP logo and petrol station forecourt sign on January 22, 2024 in Southend, United Kingdom.
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British oil giant BP reported stronger-than-expected second-quarter net profit on Tuesday and raised its dividend, despite previously warning of significantly lower refining margins.
The oil and gas giant reported second-quarter profit on a alternative cost basis, which is used as a proxy for net profit, of $2.8 billion, beating analysts’ expectations of $2.6 billion, in keeping with a consensus compiled by LSEG.
BP reported net income of $2.7 billion for the primary three months of the 12 months and $2.6 billion for the second quarter of 2023.
The energy company announced that it had increased its dividend by 10% from 7.27 cents to eight cents per share and maintained the dimensions of its share buyback program at $1.75 billion for the following three months.
Kate Thomson, BP’s chief financial officer, said on Tuesday that the corporate’s decision to extend shareholder returns “reflects the confidence we have in our performance and our cash generation prospects.”
Blood pressure said Earlier this month, the corporate said weak refining margins and lower oil trading results would likely reduce second-quarter results by as much as $700 million. On Tuesday, the corporate confirmed a $1.5 billion writedown, partly resulting from plans to cut back refining operations at its Gelsenkirchen plant.
“We are focusing on the whole business and reducing costs while accelerating our path to 2025,” BP CEO Murray Auchincloss said in an announcement.
“Our recent approval to develop the Kaskida project in the Gulf of Mexico and our decision to assume full ownership of bp Bunge Bioenergia while scaling back plans for new biofuel projects demonstrate our commitment to emerging as a simpler, more focused and higher value company,” he added.
BP’s net debt stood at $22.6 billion at the top of the second quarter, down from $23.7 billion in the identical period last 12 months.
Shares within the London-listed company rose 1.9 percent on Tuesday morning.
BP’s share price has fallen by around 2.8 percent for the reason that starting of the 12 months. By comparison, the shares of its British competitor Sleeve have risen nearly 8 percent thus far this 12 months, while shares in U.S. oil giant Exxon Mobil have gained over 16 percent.
Investor confidence
BP is releasing its second-quarter results at a time when the corporate is attempting to restore investor confidence in its strategy.
Analysts at RBC Capital Markets said BP reported “robust” second-quarter earnings, “with a slightly better profit margin, mainly due to a lower-than-expected tax rate.”
They added that BP’s dividend increase was on the upper end of market expectations, while the reduction in net debt “should be welcomed” as rising net debt had been seen as an issue for BP’s investment prospects.
In recent months, BP has come under pressure from activist investor Bluebell Capital Partners to expand its investments within the oil and gas sector and cut back its green guarantees.
Under the leadership of Bernard Looney, the resigned in September After lower than 4 years in office, BP had promised to cut back its overall emissions by 35 to 40 percent by the top of the last decade.
The company, which was one among the primary energy giants to announce plans to cut back emissions to net zero “by 2050 or sooner,” has since watered down those climate plans. BP said in a technique update last 12 months Instead, they’ll aim for a cut of 20 to 30 percent, arguing that they should proceed investing in oil and gas to fulfill demand.
Reuters reported At the top of June, BP CEO Murray Auchincloss imposed a hiring freeze and suspended renewable energy projects as a part of a cost-cutting plan to extend earnings. BP said on the time that Auchincloss had introduced six priorities “to operate as a simpler, more focused and more valuable company.”
Shell is anticipated to announce second-quarter results on Thursday, with Exxon Mobil and Chevron expected to follow suit on Friday.
Norwegian oil and gas producer Equinor on Wednesday reported a 4% decline in profits within the second quarter, beating analysts’ expectations.
