BP reported strong financial results in the first quarter of 2023, with a profit of $5 billion. This is up from the previous quarter, due to excellent oil and gas trading and a reduction in share buyback programs.
BP’s strong performance in Q1 2023 mirrors that of other energy companies, such as Exxon Mobil and Chevron, which reported positive earnings results as energy prices remain stable despite slight dips. BP’s underlying replacement cost profit, which measures net income, hit $4.96 billion, beating forecasts of $4.3 billion, according to a company survey of analysts.
However, this is lower than the $6.25 billion reported in the first quarter of 2022. BP’s profits were attributed to “an exceptional gas marketing and trading result, a lower level of refinery turnaround activity, and a very strong oil trading result,” the company said. The drop in oil and gas prices and refining margins partially offset these gains.
BP plans to buy back an additional $1.75 billion of shares over the next three months, exceeding its goal of using 60% of surplus cash for this purpose. This amount is less than the $2.75 billion bought back in the previous three months. The company’s share price was down around 4% in early trading at 513.3 pence, while an index of European oil companies dropped around 1%.
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The dividend remained unchanged at 6.61 cents per share, following a 10% increase in February. BP had previously halved its payout in response to the pandemic. BP predicts strong oil and European gas prices in the second quarter, but refinery profit margins are expected to weaken due to lower diesel prices.
BP has outperformed other companies in the sector this year, with its shares rising 10%, compared to a 6% rise for Exxon and a 3% gain for Shell. Benchmark Brent crude oil prices averaged $81 per barrel in the first quarter of the year, down 16% from the previous year and 7% from the fourth quarter.
BP reported a record profit of $28 billion in 2022, thanks to soaring energy prices and market volatility, which benefited its large trading business. The company announced in February that it would repurchase $2.75 billion worth of shares over the next three months, following a purchase of $11.7 billion in 2022.
In conclusion, BP’s strong financial results in the first quarter of 2023, backed by its robust trading business and reduced share buyback programs, show its ability to remain resilient despite the challenges posed by the pandemic and other economic headwinds.
