British oil & gas company BP reported Q2 group profits of $9.5bn, jumping more than 2.8x as compared to the same period last year. This was driven by strong realized refining margins, continuing exceptional oil trading performance, and higher liquids realizations. Total revenues rose 85% YoY to $69.5bn on higher energy prices. Operating cash flow for Q2 more than doubled YoY to $10.9bn, which includes $1.2bn of Gulf of Mexico oil spill payments. Capital expenditure increased 12% YoY to $2.8bn. Divestment proceeds rose more than 3x YoY to $722mn. The firm’s credit profile also strengthened with net debt falling by ~10bn in a year to $22.8bn and cash and cash equivalents standing at a comfortable level of $33bn. In light of the strong earnings performance, BP has declared a 10% increase in its quarterly dividend to $0.06/share, even as the company executed share buybacks of up to $4.8bn since the start of the year.
In June, BP agreed to acquire a 40.5% stake in the Asian Renewable Energy Hub (AREH), thus becoming an operator of an Australian renewable energy project. On its EV charging strategy, the company announced expansion plans with Iberdrola in Spain and Portugal, signing a contract to operate China’s largest fast EV charging hub. BP expects Q3 2022 upstream production to be broadly flat compared to Q2, with improved base performance offset by planned maintenance activity in high-margin regions. For the full-year, the company has guided for $14-15bn of capital expenditure, $2-3bn in divestment & other proceeds, Gulf of Mexico oil spill payments of $1.4bn pre-tax, and an underlying effective tax rate to be around 35%.
BP’s 2.939% 2051 was up 2.11 points to 77.96, yielding 4.28%.