British oil giant BP has announced a strong rebound in net profit for the third quarter, following a difficult year which saw the company pushed into the red due to accounting charges. The profit after taxation for the three months to September stood at $4.9 billion, compared to a net loss of $2.2 billion during the same period the previous year. However, underlying replacement cost profit, excluding exceptional items, more than halved to $3.3 billion, falling short of market expectations of around $4.0 billion.
The improved performance was mostly driven by higher refining margins and increased oil and gas production. However, lower oil and gas realizations and weak gas trading affected the underlying results. Despite the positive financial results, BP’s share price dropped by 4.5% to 502.80 pence in early morning deals, making it the biggest faller on London’s stock market.
BP’s interim chief executive, Murray Auchincloss, expressed satisfaction with the company’s solid quarter and strong operational performance, highlighting the focus on delivery. Auchincloss took over in September after former CEO Bernard Looney unexpectedly resigned due to his failure to disclose past relationships with colleagues. Auchincloss will act as interim CEO while the search for a permanent successor continues.
BP also announced a new stock buyback worth $1.5 billion. However, the share price decline suggests that investors were not impressed by this move. Analyst Richard Hunter from Interactive Investor noted that while the quarterly performance was improved, there were concerns over lower oil and gas realizations and weak gas trading.
Looney, who left his position as CEO after less than four years, successfully led BP through a challenging period marked by volatile oil prices due to the Covid-19 pandemic and Russia’s invasion of Ukraine. He faced criticism from environmentalists who accused BP and other companies in the sector of not doing enough to transition away from fossil fuels.
Looney assumed the top role in February 2020, shortly before the 10th anniversary of the Deepwater Horizon oil spill in the Gulf of Mexico, which was the worst oil spill in US history. BP’s strong rebound in net profit for the third quarter demonstrates the company’s ability to recover from challenging situations and its commitment to delivering returns for shareholders. However, concerns remain about the company’s ability to adapt to the energy transition and the need for a permanent CEO to steer BP’s future direction.
More detail via Malay Mail here… ( Image via Malay Mail )
