BP's Q4 profit sinks to four-year low
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The news: British oil major BP reported a sharp drop in fourth-quarter 2024 profits on Tuesday and committed to a “fundamental” strategy reset.
The numbers: BP reported a weaker than expected Q4 replacement cost profit (used as a proxy for net profit) of USD1.2 billion ($1.91 billion), compared with USD2.3 billion during the same period in 2023.
The context: Explaining the poor results, BP cited weaker “realised refining margins, higher impact from turnaround activity, seasonally lower customer volumes and fuels margins and higher other businesses & corporate underlying charge.”
The company also announced a USD1.75 billion share buyback which it intends to execute prior to reporting first quarter results this year.
Shares in BP rallied 7% on Monday on news that activist investor Elliott had taken a large stake in the struggling oil major. BP has been underperforming compared to peers, with significant criticism falling at the feet of the company’s board members. BP’s shares have dropped almost 8% over five years, while those of rival Shell have gained 32%. Exxon Mobil shares are up 77% over the same period.
All eyes will be focused on BP's upcoming Capital Markets Update in February, as management will be under pressure to unveil drastic changes to regain investor trust.
What they said: BP CEO Murray Auchincloss said: “Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns. It will be a new direction for bp and we look forward to sharing it at our Capital Markets Update on 26 February.”
The source: BP press release
