Energy giant BP (LON:BP) revealed profits have slumped 18% to $2.3 billion (£1.8bn) in its most recent quarter as it confirms a reduction in margins in its refining business and weak oil trading.
Analysts had expected the drop in net income which was 30% less than the same period last year.
The firm said upstream oil and gas production was up 3% for first nine months of 2024 vs 2023 and that EV charging sales increased 80% year-on-year.
Meanwhile, it said operating cash flow for the third quarter and nine months was $6.8bn and $19.9bn respectively, down from $8.7 billion and $22.7 billion for the same periods in 2023.
However capital expenditure in the third quarter and nine months was higher – $4.5bn and $12.5bn respectively, compared with $3.6 billion and $11.5 billion in the same periods of 2023. Third quarter and nine months 2024 include a $0.7-billion initial
payment in respect of German offshore wind.
BP shares have fallen 24% in the last year as Auchincloss seeks to scale back the firm’s renewable energy plans and focus on oil and gas to regain investor confidence.
In the firm’s update to the stock market, Auchincloss said the firm has made “significant progress”.
© Supplied by BP“We have made significant progress since we laid out our six priorities earlier this year to make BP simpler, more focused and higher value,” he said.
“In oil and gas, we see the potential to grow through the decade with a focus on value over volume.
“We also have a deep belief in the opportunity afforded by the energy transition – we have established a number of leading positions and will continue high-grading our investments to ensure they compete with the rest of our business. I am absolutely clear that the actions we are taking will grow the value of BP.”
The energy giant had warned of a slump in profit margins at their oil refining businesses – major parts of the firms’ overall income streams – earlier this month.
The slide in margins, also reported by Shell (LON:SHEL)which will unveil its third quarter results the day after the budget, comes partly as a result of a more general downturn in global demand for oil recently, across consumer and industrial sectors.
Brent crude prices remain about 10% down since the start of 2024.
© Supplied by BPChief financial officer Kate Thomson said the firm was on track to meet costs savings targets and a $1.75bn for shareholders.
“In the third quarter, we delivered an underlying replacement cost profit of $2.3 billion while continuing to transform our business.
“We are in action to deliver efficiencies and are confident in achieving at least $2 billion of cash cost savings by the end of 2026 relative to 2023.
“Our financial frame is unchanged. Today, we are announcing a dividend of 8 cents per
share and a $1.75 billion share buyback as part of our $3.5 billion commitment for the second half of 2024.”
