The British oil company BP wants to invest billions more in share buybacks despite a slump in profits in the final quarter of 2023.
The British oil company BP wants to invest billions more in share buybacks despite a slump in profits in the final quarter of 2023. In the first half of the current year, its own securities are to be acquired for 3.5 billion US dollars (3.25 billion euros), as the company announced on Tuesday when presenting its business figures. The pace of share buybacks is expected to be maintained until the end of next year. In the last three months of 2023, special effects put pressure on profits, but adjusted for these, the British performed better than analysts expected.
Company CEO Murray Auchincloss, who was appointed last month, emphasized his desire to “increase long-term value for our shareholders,” according to the statement.
In the last quarter of 2023, the group earned $371 million due to impairments – including on commodity-related financial instruments. A year earlier, BP reported $10.8 billion.
Adjusted for special effects, however, a profit of $2.99 billion remained in the final quarter. The quarterly dividend is expected to rise by 10 percent to 7.27 cents per share.
The US oil companies Chevron and ExxonMobil as well as the oil and gas multinational Shell recently reported a slump in profits in the final quarter, but performed better than experts expected.
The results announcement caps a turbulent few months marked by the abrupt resignation of former BP boss Bernard Looney, a flood of rumors about a potential takeover target and, most recently, activist investor Bluebell Capital Partners’ call for renewable energy spending to divert to oil and gas.
For the full year 2023, BP will have a surplus attributable to shareholders of $15.2 billion. In the previous year, however, the company reported a loss of almost $2.5 billion due to write-downs worth billions on its stake in the Russian oil company Rosneft.
Adjusted for special effects, a profit of $13.8 billion remained in 2023 – after $27.7 billion a year earlier. In 2022, the entire industry benefited from the jump in oil and gas prices as a result of Russia’s war against Ukraine, and this effect is returning to normal.
While Auchincloss plans to put more money than expected into share buybacks, he wants to keep the investment under control. BP will invest $16 billion this year and next. Management had previously stated a medium-term target of 14 to 18 billion.
The company now plans to return at least 80 percent of excess cash inflow to shareholders, compared to previously targeting 60 percent.
In London, BP shares temporarily gained 5.57 percent to 479.45 pence.
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LONDON (dpa-AFX)
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