BP Posts RC Profit In Q1, Underlying RC Profit Down; Stock Dips

British energy major BP Plc reported Tuesday a replacement cost profit in its first quarter, compared to last year’s hefty loss, while underlying replacement cost profit was lower as last year was benefited by surge in fuel prices following Russia’s invasion of Ukraine. The company also announced a further $17.5 billion share buyback.

BP shares were losing around 5 percent in the morning trading in London as well as in pre-market activity on the NYSE. As per reports, the slide in shares partly reflected slowing buyback program.

Chief Financial Officer Murray Auchincloss said, “In the first quarter, bp delivered resilient earnings and continues to execute against its unchanged financial frame. We are strengthening the balance sheet, investing with discipline to advance our strategy, and are committed to returning 60% of 2023 surplus cash flow through share buybacks with a further $1.75 billion announced for the first quarter.”

Looking ahead for the second quarter, bp expects reported upstream production to be lower compared to first quarter 2023. Further, for fiscal 2023, bp continues to expect both reported and underlying upstream production to be broadly flat compared with 2022.

bp said it expects to be able to deliver share buybacks of around $4.0 billion per annum, at the lower end of its $14-18 billion capital expenditure range, and have capacity for an annual increase in the dividend per ordinary share of around 4 percent.

For the first quarter, replacement cost or RC profit was $8.67 billion, compared to loss of $23.05 billion a year ago.

Underlying RC profit was $4.96 billion, compared to last year’s $6.25 billion. Underlying RC profit per ordinary share was 27.74 cents, down from last year’s 32.00 cents. Underlying RC profit per ADS was $1.66, compared to prior year’s $1.92.

For the quarter, profit attributable to bp shareholders was $8.22 billion, compared with a loss of $20.38 billion in the same period of 2022.

Earnings per share were 45.06 cents, compared to loss of 104.46 cents in the prior year. Earnings per ADS were $2.70, compared to loss of $6.27 last year.

The latest results included a net favourable pre-tax impact of $3.9 billion, compared with an adverse pre-tax impact of $30.8 billion in the same period of 2022, mainly related to bp’s decision to exit its 19.75 percent shareholding in Rosneft.

Sequentially, RC profit and profit attributable to shareholders declined from $11.87 billion and $10.80 billion, respectively, recorded in the fourth quarter. However, underlying RC profit improved from $4.81 billion generated in the fourth quarter.

Total revenues and other income in the first quarter grew to $56.95 billion from prior year’s $51.22 billion. Sales and other operating revenues were $56.18 billion, up from $49.26 billion last year.

Sequentially, total revenues and other income fell from $70.36 billion, and sales and other operating revenues fell from $69.26 billion generated in the fourth quarter.

In London, bp shares were trading at 500 pence, down 4.8 percent.

In pre-market activity on the NYSE, bp shares were trading at $38.12, down 4.7 percent.

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