|
BP PLC on Tuesday announced better-than-expected first quarter profit reflecting ‘exceptional’ oil trading results thanks to higher energy prices. The London-based oil major said underlying replacement cost profit ballooned to $3.20 billion in the first quarter of 2026 from $1.38 billion the year prior, well ahead of $2.67 billion expected by company-compiled market consensus. By division, underlying RC profit in Gas & Low Carbon Energy rose to $1.34 billion from $997 million a year before, but Oil Production & Operations fell to $1.98 billion from $2.90 billion. Most significantly, Customers & Products underlying RC profit multiplied to $3.20 billion from $677 million. This outstripped consensus of $2.47 billion, reflecting a stronger midstream performance and higher margins. ‘The oil trading contribution for the first quarter was exceptional compared to the average result in the same period last year,’ BP said. Shares in BP rose 2.4% to 586.00 pence each in London early Tuesday. It was the best performing stock on the FTSE 100 index which was up just 0.2%. First-quarter pretax profit totalled $7.37 billion, more than double last year’s $3.13 billion. Profit attributable to shareholders rose to $3.84 billion from $687 million a year before. Diluted earnings per share were 24.53 US cents compared to 4.27 cents a year ago. Revenue rose 11% to $52.26 billion from $46.91 billion a year prior. Operating cash flow edged up to $2.86 billion from $2.83 billion, after taking into account a $6.0 billion adjusted working capital build largely driven by rising oil prices in addition to the seasonal inventory builds. Net debt was reduced to $25.31 billion as of March 31 from $26.97 billion a year before, but was higher than $22.18 billion on December 31. Capital expenditure amounted to $3.29 billion, lower than $3.62 billion a year ago. Chief Executive Meg O’Neill, who joined BP at the start of the month, said it was another quarter of ‘strong operational and financial delivery, and we made further progress towards our 2027 targets’. ‘We had high plant reliability, high refining availability and increased production in the Gulf of America and at bpx Energy, our US onshore business - keeping production levels steady despite the ongoing disruption,’ she added. BP said the average Brent oil marker price was $81.13 per barrel for the first quarter of 2026, up 27% from $63.73 in the fourth quarter and 7.1% higher than $75.73 a year ago. On Tuesday morning, Brent was trading at $111.34 per barrel. The oil producer said it continues to ‘closely monitor the situation in the Middle East’, adding that the ‘full impact will be determined by the extent and duration of the current market conditions’. BP declared a first-quarter dividend of 8.320 US cents per share, up 4.0% from 8.000 cents a year before, or 6.226 pence, up from 6.176p. The company reiterated its primary target of $14 to $18 billion of net debt by end 2027 and its 2026 capital expenditure budget in the range of $13 billion to $13.5 billion. It plans to reduce its perpetual hybrid bond capital to around $9 /billion from $13.3 billion, as a result of continued balance sheet strengthening and proceeds from disposals. For the second quarter, BP expects reported upstream production to be lower compared with the first quarter. In its customers business, BP expects seasonally higher volumes to be more than offset by a lower midstream result when compared to the first quarter. In products, BP expects that, compared to the first quarter, refining throughput to be impacted by a higher level of planned refinery turnaround activity. For 2026 as whole, BP now expects upstream production to be lower due to effects of the Middle East crisis and underlying upstream production to be broadly flat compared with 2025. BP continues to expect sale proceeds to be around $9 billion to $10 billion in 2026. Copyright 2026 Alliance News Ltd. All Rights Reserved.
|
