BP 2013 profits plummet on selloff programme
Following rival oil company Shell’s predictably disappointing results last week, BP has confirmed market expectations that its profits took a hit in 2013.
The oil giant saw underlying replacement cost profit – a measurement that excludes gains or losses on the value of inventories – fall to $2.8bn (£1.7bn) in the fourth quarter from the $3.9bn seen a year earlier.
A major divestments programme, weaker refining margins and higher depreciation and exploration write-offs from new projects and exploration investment hit profits.
Results were also affected by BP's upping of legal provision the 2010 Gulf of Mexico oil spill to $42.7bn.
Full-year underlying replacement cost profit was $13.4bn (£8.2bn) compared with $17.1bn in 2012 – a 21.6 per cent drop.
Profit before tax in the quarter was $1.2bn from $5.7bn in the third quarter.
But the company said that strong growth in underlying oil and gas production, particularly in key regions, partially offset negative impacts to profits.
Total revenues were up 2.1 per cent in 2013 – to $396bn from $388bn in 2012.
It also upped its fourth quarter dividend to 9.5 cents per share from 5.6 cents per share.
Bob Dudley, BP chief executive, said:
BP delivered strong operating performance throughout 2013, with increased asset reliability and major project delivery in both our Upstream and Downstream businesses. These achievements underpin our financial targets for 2014 and lay the foundation for continued growth in sustainable free cash flow.
Last week Shell chief executive Ben van Beurden set out a new agenda for Shell, stressing rigorous capital discipline. Similarly, Dudley has said this morning:
Capital discipline is central to BP's strategy; making the right investment choices, sticking to our capital limits, and actively managing our portfolio in pursuit of long-term value.
BP says it’ll provide investors with more details of future plans in a presentation on 4 March.
Shares are down over one per cent this morning:
(Google)