The BP logo will appear outside a gas station near Warminster, Wiltshire, UK on August 15th, 2022.
Matt Cardi | Getty Images News | Getty Images
British oil majors BP On Tuesday, it announced its pledge to post a sharp decline in earnings for the four quarter due to weak refinement margins, and to “fundamentally” reset its strategy.
The energy company posted the underlying replacement cost profit (RC profit) used as a proxy for net profit in the fourth quarter for $1.169 billion, but at $2.99 ​​billion for the same period last year. Yes, analysts forecast is $1.2 billion. In LSEG opinion polls.
The company said 48% of its quarterly RC profits were “higher impacts of weaker realization margins, turnaround activity, seasonal customer volume and fuel margins, and higher other companies and businesses’ underlying charging.” I think this is due to
BP’s net debt was shy of just $23 billion in the fourth quarter, up 10% year-on-year. Capital Expenditures (CAPEX) reached $3.7 billion between October and December.
Nevertheless, the fighting energy companies began repurchasing $1.75 billion in stock in the fourth quarter, with a regular dividend per share of $0.08. Analysts have previously questioned whether BP would slow down stock repurchases. The balance sheet has been adjusted.
“BP has not been given any further guidance, but is led to a buyback in the first quarter results from $1.755 billion. We had expected the results to be reduced to a lower run rate, but we had bought back. There was uncertainty whether a reduction in the CMD or outcome is hoping that BP will reduce its buyback programme,” RBC analysts said Tuesday.
In its business breakdown, BP noted that it reduced a 15% decline in gas and low carbon energy RC profit performance to $1.84 billion despite a sharp recovery from $1 billion in the last quarter. . Oil production and operations increased 37% per year, but the company flagged the overall “weak” contribution from the oil trading sector after weaker refinement margins.
BP’s shares fell by just 0.13% at 8:40am London time, with little change following the results.
Reset
In a statement with the results, CEO Murray Auchincloss said the company is “restructuring” its portfolio with “strong advancements” to reduce costs and further planned overhauls.
“Now we are planning to radically reset our strategy and drive further improvements in performance by withstanding growth in cash flow and returns. That will be a new direction for BP,” he said. .
After Russia’s 2022 invasion of Ukraine and Western and G7 sanctions on Moscow barrels, oil majors have overcome the trend over the past year as crude prices recedes after initial support. In the January trading update, BP flagged higher company costs, and in the lower quarter of the fourth quarter, one-off fees related to the acquisition of bioethanol.
BP has seen a significant decline in colleagues’ performance, with stocks falling by around 9% last weekend. shell. Following weekend reporting, activist investor Elliott Management could build stocks on struggling oil majors, putting pressure on energy companies to shift gears for core oil and gas businesses The stock was acquired following reports that it promoted speculation that it was sexual.
Otherwise, speculation has long been mounted as to whether BP could become a potential acquisition target, but the company’s £74 billion size could pose a challenge for suitors.
BP has sought to change its fortune through a massive restructuring that includes downsizing leadership in Auchincloss’ efforts to achieve at least $2 billion in cash savings by the end of 2026. The role and last week, it revealed that it is looking for buyers for its ruhr oel gmbh German refinery assets. However, concerns remain in the clarity of BP’s strategic direction amid the vast green energy ambitions.
