BP sticks to buybacks despite profit slide

UK oil major BP (LSE: BP) said Tuesday it is maintaining its commitment to return at least $14 billion to shareholders through share buybacks by 2025, despite reporting a 38% slide in fourth-quarter underlying replacement cost (RC) profit. BP shares rose 5.5% early Tuesday following the results statement.

While full-year revenue declined 14% to $213.03 billion amid falling oil prices, 2023 RC pretax profit jumped 54% to $23.75 billion as expenses dropped. But quarterly RC profit before tax sank to $3.57 billion from $19.15 billion a year earlier as revenue decreased $17.77 billion.

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“We remain focused on strengthening the balance sheet, with net debt falling to $20.9 billion,” said CFO Kate Thomson, newly appointed along with CEO Murray Auchincloss.

BP increased its dividend by 10% and announced plans for a further $1.75 billion in share repurchases in early 2024, after completing $1.5 billion in buybacks last week.

“Our destination remains unchanged – from international oil company to integrated energy company,” Auchincloss said. The transition aims to deliver higher value for shareholders over the long term, with BP targeting returns of at least 80% of surplus cash.