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Highlights
- BP Plc reported a profit of US$6.2 billion (£4.9 billion) in Q1 2022 as compared to US$2.6 billion in Q1 of 2021.
- The oil giant announced another share buyback programme worth US$2.5 billion on the back of the bumper profits.
British multinational oil and gas company BP Plc (LON: BP.) has been in the spotlight after the company announced its first-quarter profit surged to its highest in the last 10 years on the back of surging oil and gas prices, prompting calls for the energy giant to face windfall tax in the near future. The company also said that its decision to suspend its Russian operations took it into a huge net loss in Q1 2022.
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First-quarter result
The multinational oil and gas company reported a loss of US$20.3 billion in Q1 2022, from US$4.7billion in the same period of 2021, after it has taken a US$25.5 billion hit from its decision to ditch its 19.75% stake in Russian oil giant Rosneft. The company was one of the first energy giants to pull out its operations from Russia because of the war in Ukraine, which resulted in material non-cash charges and heading loss.
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The company plunged to a US$23 billion replacement cost loss for Q1 2021, from US$3.3 billion in Q1 2021. However, the oil giant’s underlying replacement cost profit in the first quarter more than doubled to US$6.2 billion, up from US$2.6 billion in Q1 2021 and US$4.1 billion in Q4 of 2021, driven by exceptional oil and gas trading, stronger refining result and higher oil realization, as the geopolitical tension between Russia and Ukraine pushed the oil and gas prices to its multi-year highs.
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The company maintained its dividend of 5.46 cents per share payable in June 2022 as its revenue jumped by 40% to US$52 billion in Q1 from the year earlier. Its net debt fell to US$27.5 billion in Q1 2022, from US$33.3 billion in Q1 2021.
Future outlook
The company announced its plans to invest around £18 billion into the UK energy system by 2030, while driving down operational emissions, amid sharply rising inflationary pressure and growing calls for a windfall tax on oil and gas businesses. It further announced another share buyback programme worth US$2.5 billion on the back of the bumper profits.
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The company expects an output of about 200,000 barrels per day of oil equivalent at its Thunder Horse projects in the US Gulf of Mexico by the end of the year from the current 100,000 boepd and except the other businesses and corporate underlying annual charge to be between US$1.2-1.4 billion for 2022. However, the oil giant said that the lack of global oil investment worldwide could lead to oil scarcity.
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Share price performance
BP Plc (LON: BP.) is listed on the London Stock Exchange since 24 November 2003 and is an FTSE 100 constituent. The oil and gas giant has been performing well lately with its share value appreciated by 32.16% over the last year as of 3 May 2022, while its year-to-date return stands at 21.19%.
The market cap of the company stands at £76,466.22 million as of 3 May 2022. Shares of BP Plc were trading up by 2.30% at around 10:40 AM (GMT +1) on 3 May 2022, at GBX 400.55.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
