BP PLC (LSE: BP.) announced a significant plunge in profits due to declining refining margins, yet it increased its shareholder dividend by 10%.
“Despite undergoing considerable restructuring, our performance this quarter remained robust with impressive cash flow – during a time of substantial turnaround activity and shrinking margins in our refining division,” said Chief Executive Bernard Looney.
For the quarter ending 30th June 2023, the replacement cost profit amounted to US$2.59bn, a decline from US$8.45bn the previous year and US$4.96bn in the last quarter.
Operating cash flow was US$6.29bn, down from US$10.86bn the previous year, whereas the dividend saw a 10% increase to 7.27 cents from 6.006 cents earlier.
BP highlighted that compared to the first quarter of 2023, the results show significantly lower refining margins, an unusually high level of maintenance and turnaround activities, and a disappointing oil trading result. This also includes lower oil and gas realizations and a notably strong gas marketing and trading outcome.
BP indicated its plan to conduct a further US$1.5bn share buyback prior to the release of its third-quarter results, adhering to its pledge to allocate 60% of its 2023 surplus cash flow for this purpose.
With a capital expenditure of US$4.3bn in the second quarter, which includes US$1.1bn for the purchase of TravelCenters of America, BP maintains its capex forecast of US$16-18bn for 2023.
BP CEO Bernard Looney stated:
We continue to exhibit strong performance amidst significant transformation.
Despite a period marked by a great deal of turnaround activity and less robust margins within our refining sector, our fundamental performance has proven to be sturdy, ensuring robust cash flow.
We are rapidly implementing our strategic plan, having initiated two major oil and gas projects to ensure a consistent supply of energy for today. Additionally, we are speeding up our transformation via our five transition growth engines.
We also prioritize delivering value to our shareholders by increasing our dividend and announcing an additional share buyback.
