“The results show that BP continues to perform while transforming,” chief executive officer Bernard Looney said in a statement yesterday.
LONDON: BP Plc has hiked its dividend and accelerated share buybacks to the fastest pace yet after an “exceptional” in oil refining and trading lifted profits above even the highest expectations.
The oil and gas industry is boosting returns to shareholders as the cash rolls in, even while the energy crisis triggered by Russia’s invasion of Ukraine threatens the global economy. BP said it expects prices to remain high and highlighted its investments in additional supplies.
“The results show that BP continues to perform while transforming,” chief executive officer Bernard Looney said in a statement yesterday.
The company is “providing the oil and gas the world needs today – while at the same time investing to accelerate the energy transition, according to Looney.
Following in the footsteps of most of its peers, the London-based company said it will repurchase US$3.5bil (RM16bil) of shares over the next three months, adding to the US$3.8bil (RM17bil) it already bought back in the first half. It also increased its dividend by 10%.
Shares of the company rose 4.5% to 409.8 pence as of 9:30am in London.
The dividend was increased to six US cents (27 sen) a share, an improvement from a previous commitment to raise the payout by around 4% annually through to 2025.
Net debt fell to US$22.82bil (RM101.65bil) at the end of the period, down from US$32.7bil (RM146bil) a year ago.
The results showed BP is “delivering across all three key areas: earnings/cash, capital discipline and shareholder distributions,” Redburn analysts wrote in a research note.
BP’s second-quarter adjusted net income was US$8.45bil (RM38bil), the highest since 2008 and comfortably beating even the highest analyst estimate. This wasn’t just driven by high crude and natural gas prices – the company’s refineries earned strong margins and its oil traders delivered an “exceptional” performance.
The company never discloses how much profit its oil traders generate, but did say that adjusted earnings before interest, taxation, depreciation and amortisation for its refining and trading unit was US$3.73bil (RM16.6bil), compared with just US$301mil (RM1.34bil) a year ago.
Gas trading fared worse, delivering an “average” result for the quarter, the company said. That in part was a result of a halt to operations at the Freeport liquefied natural gas facility in the US, which will lead to significant reduction in the number of cargoes it expects to receive.
The oil sector’s sky-high profits come at a politically tricky time for an industry accused of profiteering from the fallout from Russian President Vladimir Putin’s aggression, while also failing to invest enough in new drilling.
Alongside its earnings statement, BP published an extensive list of investments it is making in the UK, where the rising cost of energy has become a hot political issue and the North Sea oil and gas industry has already been hit by a windfall tax.
That hasn’t stopped calls for further taxation. Friends of the Earth campaigner Sana Yusuf said that a much tougher windfall tax on oil and gas profits is needed.
“It beggars belief that these companies are raking in such huge sums in the midst of a cost-of-living crisis,” she said in a statement.
Collectively, the world’s five major international oil companies made more money in the second quarter than ever before, raking in more than US$60bil (RM267bil). — Bloomberg
