Dividend and buyback
BP looks after its shareholders
February 6, 2024, 3:47 p.m
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The oil company BP ended the year better than expected in the final quarter. After twelve months, the bottom line is only half of the previous year’s profit, which was driven by a special economic situation. But the shareholders shouldn’t suffer from this: the distribution remains stable and the group invests in maintaining the share price.
Energy giant BP performed better than expected in the fourth quarter thanks to booming business in gas trading. At almost three billion dollars, the net profit was more than a third below the previous year’s value, which was driven by high energy prices, as BP announced. However, it exceeded analysts’ expectations. Murray Auchincloss, who was officially appointed as CEO in January, assured shareholders of an unchanged dividend of 7.27 cents per share despite the decline in profits and also announced share buybacks worth $3.5 billion in the first half of the year.
A total of $14 billion worth of securities are to be bought back by 2025. “BP is delivering what investors demanded: higher payouts and more visibility,” commented Jefferies analyst Giacomo Romeo. The news was well received on the stock market: BP shares were up six percent. The shares had underperformed those of their competitors in recent months as investors had concerns about the company’s strategy and the change in leadership.
BP boss Auchincloss reiterated that the group would reduce oil and gas production and significantly expand its renewable energy and low-carbon energy businesses by the end of the decade. “As we move towards 2025, we will focus on simplifying the business,” he stressed. BP will choose the “projects with the highest return and value.”
In addition to strong gas trading, the fourth quarter result also reflected “significantly lower” refining margins, weak oil trading and disruptions in exploration, BP explained the balance sheet. For the year as a whole, profits totaled $13.8 billion. That was only half of the profit from the previous year, when high energy prices caused the results of oil and gas companies to skyrocket. The strong quarterly profit should be a relief for CEO Auchincloss. In the previous two quarters, the group had significantly missed forecasts.