BP today reported an underlying replacement cost profit – the preferred measure of net profit – of $8.45 billion for the second quarter, up from $6.2 billion in the previous quarter and well above analysts’ estimates of $6.8 billions of dollars.
The rise in second-quarter profits – the highest quarterly profit since 2008 – “was driven by strong realized refining margins, continued excellent oil trading performance and higher liquidations,” BP said.
Natural gas marketing and trading was down from “the exceptional first quarter result,” which partially offset the exceptional performance of oil trading in the second quarter. The ongoing disruption at Freeport LNG has affected LNG trading and led to a “significant reduction in the number of cargoes expected to be received”, BP said.
BP’s net debt fell for a ninth consecutive quarter to $22.8 billion at the end of the second quarter, down $4.6 billion from the end of the first quarter.
In light of the solid results, BP announced a 10% increase in its quarterly dividend to 6.006 cents per common share to reflect “the business’s underlying performance and cash generation, which enabled strong progress in share buybacks and the reduction of net debt. ” said the superintendent.
“Looking forward, on average, based on bp’s current forecasts, bp continues to expect to have the ability to grow its annual dividend per ordinary share by 4% through 2025 to around $60 per Brent barrel and under subject to the board’s discretion each quarter,” the company said.
BP also announced a further $3.5 billion share buyback, on top of the $2.5 billion share buyback program announced with its first-quarter 2022 results and completed last month.
BP wraps up a strong earnings season for the European and US supermajors, which reported solid – and in several cases record – quarterly profits amid rising oil and gas prices and rising refining margins.
Last week, Shell reported record quarterly profits for the second straight quarter, while TotalEnergies more than doubled its second-quarter net income on rising oil and gas prices, high refining margins and growing LNG demand in Europe. US majors ExxonMobil and Chevron reported their highest quarterly earnings on Friday as oil and gas prices rose and refining margins jumped to multi-year highs in the second quarter.
By Tsvetana Paraskova for Oilprice.com
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