Oil Price
BP (NYSE: BP) raised its dividend by 10% and extended its buyback program as it booked better-than-expected earnings for the second quarter of the year.
The UK-based supermajor reported on Tuesday $2.8 billion in underlying replacement cost profit – the metric closest to net profit – for April to June, up from $2.7 billion for the previous quarter.
The earnings were also higher than the $2.59 billion for the second quarter of 2023, and ahead of the analyst consensus of $2.54 billion.
Compared with the first quarter of 2024, the result reflects an average gas marketing and trading result, significantly lower realized refining margins, stronger fuels margins, and lower taxation, BP said.
Operating cash flow jumped to $8.1 billion in Q2 2024, from $5 billion in the first quarter and $6.3 billion for the second quarter of 2023.
The stronger cash flow helped BP reduce its net debt to $22.6 billion at the end of the second quarter from $24 billion as at the end of March 2024.
Earlier this month, BP warned that impairments, primarily related to the review of the Gelsenkirchen refinery in Germany, would impact the second-quarter results.
Still, the earnings came in better than expected and BP’s shares in London rose by 2% following the results release.
“Our decision to increase our dividend by 10%, and extend our buyback programme commitment to 4Q 2024, reflects the confidence we have in our performance and outlook for cash generation,” CFO Kate Thomson said.
BP’s chief executive Murray Auchincloss commented, “Our recent go-ahead of the Kaskida development in the Gulf of Mexico business, and the decision to take full ownership of bp Bunge Bioenergia while scaling back plans for new biofuels projects, demonstrate our commitment to delivering as a simpler, more focused and higher value company.”
BP and its UK-based peer Shell have recently pivoted back to oil and gas operations while carefully studying which low-carbon energy projects would warrant going ahead based on expected returns.
By Tsvetana Paraskova for Oilprice.com
