BP swings to Q4 loss, announces fresh $1.75bn share buyback

(Sharecast News) - BP reported a fourth-quarter loss of $1.96bn in an update on Tuesday, swinging from a profit of $371m in the same period a year earlier. For the full year, profit attributable to shareholders was $381m, down sharply from $15.24bn in 2023.

The FTSE 100 energy giant cited weaker refining margins, lower oil and gas realizations, and a higher tax rate as key factors affecting performance.

Replacement cost loss for the fourth quarter was $1.95bn, compared with a profit of $1.53bn in the prior-year period.

Underlying replacement cost profit, which strips out inventory holding effects and other adjustments, fell to $1.17bn from $2.99bn a year earlier.

For the full year, underlying replacement cost profit declined to $8.92bn from $13.84bn in 2023.

Operating cash flow for the quarter was $7.43bn, down from $9.38bn in the fourth quarter of 2023, reflecting weaker earnings.

Full-year operating cash flow also declined, reaching $27.3bn compared to $32.04bn in the prior year.

Capital expenditure for 2024 was largely stable at $16.24bn.

BP increased its quarterly dividend to eight cents per share, up from 7.27 cents a year earlier.

The firm also announced a $1.75bn share buyback to be completed before its first-quarter 2025 results.

Over the full 2024 year, BP repurchased $7.13bn in shares, slightly below the $7.92bn repurchased in 2023.

"In 2024, BP delivered operating cash flow of $27.3bn," commented chief financial officer Kate Thomson.

"During the year, we introduced our target to deliver at least $2bn of savings by the end of 2026 relative to 2023 and are making strong progress, achieving $0.8bn of structural cost reduction."

Thomson added that the company also raised the dividend per ordinary share by 10% and delivered $7bn of share buybacks.

"Our focus on capital discipline and strengthening the balance sheet continues into 2025."

Segment performance was mixed - gas and low-carbon energy reported a higher replacement cost profit before interest and tax of $1.8bn, up from $1bn in the third quarter, driven by higher realisations.

Oil production and operations posted a replacement cost profit before interest and tax of $2.6bn, up from $1.9bn in the prior quarter, as lower exploration write-offs offset weaker prices.

The customers and products segment, however, swung to a loss, with a replacement cost loss before interest and tax of $2.4bn, compared with a modest $23m profit in the third quarter, due to weaker refining margins and lower trading contributions.

BP said its net debt at the end of 2024 stood at $22.99bn, widening from $20.91bn a year earlier, despite divestment proceeds of $4.22bn.

The company announced plans to execute another $1.75bn buyback in the first quarter of 2025 and said it would review financial guidance, including share buybacks and capital expenditure, at its capital markets update later in February.

"In 2024 we laid the foundations for growth," said chief executive officer Murray Auchincloss.

"We have been reshaping our portfolio - sanctioning new major projects, and focusing our low-carbon investment - and we have made strong progress in reducing costs."

Auchincloss said that, building on the actions taken in the last 12 months, BP now planned to "fundamentally reset" its strategy and drive further improvements in performance in service of growing cash flow and returns.

"It will be a new direction for BP, and we look forward to sharing it at our capital markets update on 26 February."

Looking ahead, BP said it expected lower upstream production in the first quarter of 2025 due to recent divestments in Egypt and Trinidad.

The company said it anticipated weaker refining margins and seasonally lower demand in its customers segment.

For the full year, BP said it expected reported upstream production to decline, with a slight decrease in underlying production, while refining margins are forecast to remain stable.

At 0824 GMT, shares in BP were down 0.03% at 465p.

Reporting by Josh White for Sharecast.com.