BP to hand investors $7bn as second quarter profits increase
BP (BP.L) has posted profits of almost $2.8bn (£2.2bn) for the second quarter and lifted its dividend after beating profit forecasts.
The oil and gas major posted underlying replacement cost profit, used as a proxy for net profit, of $2.8bn for the second quarter. That beat analyst expectations of $2.6bn, according to an London Stock Exchange Group-compiled consensus.
BP made a better-than-expected half-year profit of $5.5bn, although it was down on last year’s $7.6bn amid lower profitability in its refining business.
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BP said the profit was due to “an average” performance in gas marketing and trading, lower refining margins, stronger fuels margins and “lower taxation”.
The company will lift its dividend payments while buying back stock worth $1.75bn over the next three months to bring its total buy-backs for the first six months of the year to $3.5bn — and $7bn for the year as whole.
In total BP has paid out $14.8bn to shareholders since June 2023.
Kate Thomson, BP’s chief financial officer, said: “We generated strong operating cash flow in the quarter, which helped reduce net debt to $22.6bn.
“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.
Murray Auchincloss, the firm’s new chief executive who took over at the start of the year, said: “We are driving focus across the business and reducing costs, all while building momentum in our drive to 2025.”
The FTSE 100 (^FTSE) company announced that it has decided to push ahead with investment in the deepwater Kaskida development in the Gulf of Mexico, some 14 years after the Deepwater Horizon environmental disaster in which it spilled 4.9 million barrels of oil off the coast of the US.
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In a sign of change from former CEO Bernard Looney's strategy to grow renewables and reduce fossil fuel output, BP also announced the “scaling back plans for new biofuels projects” a month after it emerged that it has put all new offshore wind projects on pause.
Alice Harrison, head of fossil fuel campaigns at Global Witness, said: “As the world faces record-breaking heat, most of us are desperate to see urgent action on the climate crisis.
“Unfortunately, it’s clear that BP couldn’t care less.
“While millions of us struggle with high temperatures and high bills, BP are raking in billions of profits, paying out massive dividends, and doubling down on dirty new oil and gas projects.”
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