- BP's second-quarter profits nosedive by 70% year-on-year, blaming softer fossil fuel prices and weak oil trading results.
- Despite the drop in profits, the British energy titan increases its dividend by 10%, signaling confidence in the company's future.
- BP, alongside other oil majors, is grappling with dwindling profits amidst volatile commodity prices, but CEO Bernard Looney remains optimistic about their strategy and resilience.
As dawn broke on Tuesday, British energy titan BP unveiled its second-quarter results, indicating a substantial 70% year-on-year plunge in profits due to softer fossil fuel prices. This phenomenon mirrors the scenario faced by the entire energy industry at large.
In the financial quarter under scrutiny, BP documented an underlying replacement cost profit, which effectively functions as a stand-in for net profit, of a tidy sum of $2.6 billion. Prior projections, as collected by Refinitiv, had forecast BP to pull in profits close to $3.5 billion for the second quarter.
This freshly reported second-quarter outcome stands in stark contrast to the stellar $4.96 billion profit the energy giant accrued during the first quarter of this year, and it's a mere fraction of the staggering $8.5 billion profit amassed in the second quarter of 2022.
BP attributed its less than stellar performance to a cocktail of factors. Key among these were a considerable slump in refining margins, an uptick in turnaround and maintenance activity, and a lackluster oil trading result. Despite the obstacles faced, BP still saw fit to elevate its dividend by 10% to 7.27 cents per ordinary share for the second quarter and plans to buy back $1.5 billion of its shares over the next three months.
Other energy majors have stumbled along the same path, finding it difficult to replicate their extraordinary profits of yesteryears due to the depression in commodity prices. Despite these challenges, BP's CEO Bernard Looney remains hopeful, citing the quarter as "very good" and expressing satisfaction with the results.
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