bp has revealed its financial results for the first quarter fiscal 2024.
For the quarter, the company reported a profit of $2.3 billion, compared to $.4 billion in the fourth quarter of last year. According to bp, the company saw a significantly lower level of turnaround activity, a strong oil and trading result and higher realized refining margins.
Segment Results
- Gas and low carbon energy: Profit before tax and interest for the quarter was $1 billion, compared to $2.2 billion last year. The company noted that the loss reflects “lower realizations and foreign exchange losses on Egyptian pound balances, partially offset by lower exploration write-offs.” Gas marketing and trading, however, was strong, coming off of a positive fourth quarter.
- Oil production and operations: Profit earned from oil production and operations reached $3.1 billion, compared to $1.9 billion the previous year. The profit can be partially offset due to an increase in production.
- Customers and products: This segment earned an impressive $1 billion, compared to a loss of $.6 billion in the same quarter last year. The company said that the higher result reflects “higher realized refining margins, a significantly lower level of turnaround activity and higher commercial optimization.”
bp highlighted its operating cash flow in the quarter, which was $5 billion. The cash flow includes a working capital build of $2.4 billion.
Savings And Buybacks
The company also noted in its quarterly report that it has a target to deliver at least $2 billion of cash cost savings by the end of 2026.
The reduction is expected to result from cost-saving measures across bp’s business underpinned by high-grading the portfolio, digital transformation, supply chain efficiencies and global capability hubs. Some of these cost savings may have associated restructuring charges.
Additionally, bp completed its $1.75 billion share buyback program, which was announced in the fourth quarter.
“bp continues to invest with discipline and a returns focused approach in our transition growth engines and in our oil, gas and refining businesses,” the company noted. “For 2024 and 2025 we expect capital expenditure of around $16 billion per annum.”
The company also renewed its commitment to maintaining a strong investment grade credit rating, with the target of further improving its credit metrics within an “A” grade credit range.
“We’ve delivered another resilient quarter financially and continued to make progress on our strategy. Oil production was up and our ACE platform in the Caspian is now producing,” said Murray Auchincloss, CEO of bp. “We are simplifying and reducing complexity across bp and plan to deliver at least $2 billion of cash cost savings by the end of 2026 through high grading our portfolio, digital transformation, supply chain efficiencies and global capability hubs.”
