BP swings back to quarterly profit despite pandemic
BP HAS swung back to a profit in its most recent quarter, bouncing back from a multibillion- dollar loss and outperforming expectations as the price of oil started to recover.
The oil giant said it had made an underlying replacement cost profit of $ 86m (£ 66m) in the third quarter of the year.
Just three months ago, BP said it had lost $ 6.7bn (£ 5.9bn) by the same measure in the second quarter, and analysts were expecting another, albeit smaller, loss of $ 120m (£ 92m) in the most recent three months.
However, the figures still show that the business has taken a major hit this year from the Covid- 19 crisis, and the impact on oil prices.
Compared with the third quarter last year, replacement cost profit dropped by almost 97 per cent from $ 2.3bn (£ 1.8bn).
Michael Hewson, an analyst at CMC Markets, said the stronger results “can’t disguise the challenges facing the industry”.
The company’s shares have been declining rapidly this year, and have lost 30 per cent of their value since BP slashed its dividend for the first time in a decade in August.
BP said it has seen a recovery in the demand for oil, as the Asian economies start opening up again following the pandemic.
Earlier this year, the demand for oil was so low that some sellers in the US were paying buyers to take it off their hands.
Brent crude, the measure most used in the UK, has rebounded from lows of less than $ 19 per barrel in April, to more than $ 40 today.
BP said it would pay shareholders a 5.25 cent ( 4p) dividend, down from 10.25 cents ( 7.9p) this time last year.
It made a $ 150m (£ 115m) profit before tax, on revenue of $ 44.2bn (£ 34bn).
BP has set a new course over the last nine months since new boss Bernard Looney took the helm.
With a focus on becoming greener, the company has promised to become “net zero” by the middle of the century, and slash oil and gas production by 40 per cent by the end of the decade.
Yesterday, Mr Looney said: “Having set out our new strategy in detail, our priority is execution and, despite a challenging environment, we are doing just that – performing while transforming.
“Major projects are coming online.”