London (AFP) – British energy giant BP on Tuesday reported a sharp rise in net profit for the third quarter as higher oil output and cost-cutting helped offset a drop in crude prices. Profit after tax jumped to $1.16 billion for the July-September period, compared with $206 million in the third quarter of 2024, BP said in an earnings statement. Stripping out exceptional items, underlying net profit dipped but beat analysts’ forecasts.
“We continue to make good progress to cut costs, strengthen our balance sheet and increase cash flow and returns,” said chief executive Murray Auchincloss. “There is much more to do but we are moving at pace, and demonstrating that BP can and will do better for our investors,” he added.
In February, BP launched a major pivot back to its more profitable oil and gas business, shelving its once industry-leading targets on reducing carbon emissions and slashing clean energy investment. However, energy prices have come under pressure this year on concerns that US President Donald Trump’s tariffs will hurt economic growth, while OPEC+ nations have produced more oil.
BP shares dipped around 0.2 percent in early trading on London’s top-tier FTSE 100 index following the results update.
– ‘Back-to-basics’ –
British rival Shell last week reported a jump in third-quarter net profit as trading margins and sales volumes improved. France’s TotalEnergies also posted soaring net profit, while US oil giants ExxonMobil and Chevron both reported lower earnings. Weaker oil prices hit Saudi Aramco, which reported on Tuesday a 2.3-percent drop in quarterly net profit.
As for BP, its latest quarter benefited from higher oil and gas production and improved refining margins. The company said it expects divestments for the full year to be higher than forecast, as it looks to simplify its business and boost performance. That comes after BP on Monday announced that it had agreed to sell stakes in certain US shale assets for $1.5 billion.
“The back-to-basics mantra is sticking,” said Derren Nathan, head of equity research at Hargreaves Lansdown. He warned, however, that “patience will be needed for those hoping for a return to bumper payouts to shareholders.”
“With no further hikes to production expected in the final quarter of the year, and oil prices near three-year lows, the immediate outlook is a little shaky,” he added. BP maintained its quarterly share buybacks at $750 million. Auchincloss said the company was “targeting further improvements in cost performance and efficiency,” and “undertaking a thorough review of our portfolio.”
BP in July named Albert Manifold as its new chairman, replacing Helge Lund, whose departure was announced amid the strategy reset.
© 2024 AFP
