BP upbeat despite falling profits in fourth quarter

Profits at oil titan BP slipped in the fourth quarter owing to lower upstream production levels, but the company assured that it well-positioned for growth after moving past 'many milestones' last year.

Profits at oil titan BP slipped in the fourth quarter owing to lower upstream production levels, but the company assured that it well-positioned for growth after moving past 'many milestones' last year.

Underlying replacement cost (RC) profit, adjusted for non-operating items and fair value accounting effects, totalled $4.0bn in the last three months of 2012, down from $5.0bn a year earlier.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Nevertheless, net debt fell from $31.5bn to $27.5bn during the quarter, with the gearing level of 18.7% within the company's target range of 10-20%.

Underlying RC profit for 2012 as a whole fell from $21.7bn to $17.6bn.

Advertisement
Advertisement - Article continues below

"We have moved past many milestones in 2012, repositioning BP through divestments and bringing on new projects. This lays a solid foundation for growth into the long term," said Chief Executive Bob Dudley.

"Moving through 2013 we will deliver further operational milestones and remain on track for delivery of our ten-point strategic plan, including our target for operating cash flow growth, by 2014."

Underlying production of oil and gas in upstream, which excludes output from the exited TNK-BP joint venture, was broadly flat in 2012, in line with the company's guidance. However, fourth-quarter production fell 7.0% year-on-year to 2.29m barrels of oil equivalent per day, as the impact of of divestments, production sharing agreement effects and natural field declines partially offset by new production from major projects.

In downstream, BP delivered a record level of earnings in 2012, its fourth consecutive year of underlying profit growth. However, the fourth quarter was met with significantly lower refining margins than the previous quarter.

Advertisement

Recommended

Visit/investments/investment-strategy/600861/how-demographics-affects-stock-valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Visit/investments/stocks-and-shares/600863/sirius-minerals-anglo-american-takeover
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Visit/investments/stockmarkets/600634/why-investors-should-be-cautiously-bullish-for-2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020
Visit/investments/stocks-and-shares/share-tips/600636/class-acts-going-cheap-buy-into-europes-best
Share tips

Class acts going cheap: buy into Europe’s best bargains

Value investing appears to be making a comeback, while shares on this side of the Atlantic are more appealing on metrics such as price/earnings ratios…
16 Jan 2020

Most Popular

Visit/economy/global-economy/600991/helicopter-money-is-coming-very-soon-but-what-form-will-it-take
Global Economy

Helicopter money is coming very soon – but what form will it take?

We’re heading for a”new normal”, says John Stepek – fiscal stimulus, and lots of it. Here’s what that really means.
16 Mar 2020
Visit/investments/600992/the-helicopters-are-being-warmed-up-we-might-be-closer-to-a-bottom-than-you
Investments

The helicopters are being warmed up – we might be closer to a bottom than you think

Governments are starting to act to bolster their economies against coronavirus. But, asks John Stepek, will throwing money at the problem slow the mar…
17 Mar 2020
Visit/investments/funds/investment-trusts/600975/now-could-be-a-good-time-to-bag-an-investment-bargain
Investment trusts

Now could be a good time to bag an investment bargain

We like investment trusts here at MoneyWeek. And they can be even better during a market crash.
16 Mar 2020
Visit/investments/stockmarkets/european-stockmarkets/600725/is-2020-the-year-for-european-small-cap
Sponsored

Is 2020 the year for European small-cap stocks?

SPONSORED CONTENT - Ollie Beckett, manager of the TR European Growth Trust, on why he believes European small-cap stocks are performing well.
12 Feb 2019