(AOF) – British firm specializing in hydrocarbons, BP (+5.47% to 479 pence) occupies the leading position within the FTSE 100 index after posting results above expectations in the fourth quarter of 2023. On the occasion of this publication, the group announced that it will accelerate the pace of its share buybacks. Over this period, it generated underlying profit of three billion dollars. According to UBS, this profit is 8% higher than the consensus and 60% higher than its estimate: $1.9 billion.
Additionally, BP delivered an operating profit of $6.1 billion, 5% above consensus and 25% above UBS’s estimate.
The broker remains Buy on the BP stock maintaining its price target at 600 pence. UBS explains that operating profit exceeded consensus thanks to “a greater than expected contribution from the OPO (Oil Production & Operations) division, partially offset by the impact of a charge at the gas division.”
Adjusted Ebitda increased from $10.30 billion to $10.56 billion between the third and fourth quarters.
Operating cash flow for this fourth quarter was $9.37 billion compared to $8.74 billion in the previous quarter. It is 43% higher than the $6.6 billion estimated by UBS.
However, BP’s annual underlying profit was almost halved year-on-year. It went from $27.65 billion in 2022 to $13.83 billion in 2023.
Increase in share buybacks
Regarding shareholder compensation, BP will increase share repurchases to $1.75 billion in the first quarter, surpassing consensus of $1.2 billion according to UBS.
The British group does not stop there and has also committed to repurchase shares for an amount of 3.5 billion dollars during the first half of 2024, while increasing the proportion of the surplus of cash to be returned to shareholders at 80%, compared to 60% previously.
Additionally, BP plans share buybacks of at least $14 billion through 2025.
For the fourth quarter, BP announced a dividend per common share of 7.270 cents, up 10% from the fourth quarter of 2022. It remains unchanged from the third quarter of 2023.
On the outlook side, BP anticipates higher sequential production and “slightly higher” upstream production for the 2024 financial year compared to that of 2023. Investments are estimated at $16 billion (compared to $16.2 billion in 2023) with a greater weighting in the first half of 2024.
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