BP Q4 Underlying RC Profit Tops Market, Plans Share Buybacks; Stock Up

(RTTNews) - Shares of BP Plc were gaining around 6 percent in the morning trading on the London Stock Exchange as well as in pre-market activity on the NYSE after the British energy major reported Tuesday fourth-quarter underlying replacement cost or RC profit above market estimates. On a reported basis, RC profit and net profit were sharply lower than last year as revenues were hit mainly by lower production and prices. The company also announced share buyback plans going ahead.

Kate Thomson, Chief financial officer, said, "bp delivered strong underlying financial performance in 2023 - we raised dividend per ordinary share by 10% and bought back $7.9 billion of shares. We remain focused on strengthening the balance sheet, with net debt falling to $20.9 billion, the lowest level over the past decade. As we look forward, we are staying disciplined, tightening our capital expenditure frame and simplifying and enhancing our share buyback guidance through 2025."

Looking ahead, bp expects first-quarter 2024 reported upstream production to be higher sequentially. For fiscal 2024, bp expects both reported and underlying upstream production to be slightly higher compared with 2023.

For the fourth quarter, the company has announced a dividend per ordinary share of 7.270 cents, up 10% from the prior year.

Further, bp said it intends to execute a $1.75 billion share buyback prior to reporting first quarter results. Furthermore, bp announced $3.5 billion for the first half of 2024.

bp plans share buybacks of at least $14 billion through 2025 as part of its commitment, on a point forward basis, to returning at least 80 percent of surplus cash flow to shareholders.

For 2024 and 2025, bp expects capital expenditure of around $16 billion per annum, in line with medium term target of $14 billion to $18 billion.

For the fourth quarter, RC profit plunged to $1.53 billion from last year's $11.87 billion.

Underlying RC profit was $2.99 billion, down from $4.81 billion a year ago. Underlying RC profit per ordinary share was 17.77 cents, compared to 26.44 cents in the prior year. Underlying RC profit per ADS was $1.07, compared to $1.59 in the prior year.

Analysts on average expected the company to report earnings of $1.05 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Profit for the period attributable to bp shareholders plunged to $371 million from last year's $10.80 billion.

Adjusted EBITDA dropped to $10.57 billion from last year's $13.10 billion.

Total revenues and other income declined to $52.59 billion from last year's $70.36 billion. Sales and other operating revenues were $52.14 billion, compared to $69.26 billion a year ago.

The Street was looking for sales of $53.5 billion for the quarter.

In London, bp shares were trading at 481.50 pence, up 6 percent. In pre-market activity on the NYSE, the shares were trading at $36.25, up 5.9 percent.

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