Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plant. Watch the video here.
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Many Thanks Happy
Hi Busman
Here's the Seeking Alpha version of the Q&A transcript. I can't find the official version yet on BP'sv website. Please see Kate's answer to Michele Della Vigna (Goldman Sachs).
https://seekingalpha.com/article/4690194-bp-p-l-c-bp-q1-2024-earnings-call-transcript
Michele Della Vigna
Thank you very much and congratulations on the focus on cost efficiency despite the relatively positive macroenvironment. Two questions, if I may. On the dividend per share, it looks like we are up for an announcement next quarter. And I was wondering, how should we think about the underlying growth. We've got 3% to 4% absolute growth of the business and we've got a share retirement that is running at between 6% and 7%. Is it too simplistic to think about growth of the business plus share retirement equal what can be achieved in terms of sustainable DPS growth?
And then secondly, on the net interest expense, it's quite a difficult line to forecast. It's been around $900 million for the last three quarters. Is it fair to assume we remain at about that run rate in the coming quarters or is there anything else we need to take into consideration? Thank you.
Murray Auchincloss
Kate, you want to handle the dividend?
Kate Thomson
Sure. So, Michele, I think you may have done my arithmetic for me. I guess a couple of points to just to add to that. So if you think about the financial frame, remember to anchor on our balance points and also the fact that we are -- our first priority is that resilient dividend and at $60, the capacity to increase by 4% per annum. But as you rightly point out, we've had previous increases in 2Q '22, 4Q '22, 2Q '23, each around 10%, underpinned by strong performance and by reduced share count.
So as you'd imagine, the Board will look into many factors when we come to that conversation in 2Q, but as you consider what we've done with our share count, I think we're 17% reduced by the end of '23 and since 2Q '23 at the moment, we are about 5.5% reduced share count. So I'll let you add that to your current arithmetic.
All IMHO DYOR
Happy
Hi, Can someone please clarify what Kate said regarding Substantial increase in divi next Qtr Please.
BP is $37.66.
6 BP shares to 1 ADR.
Therefore at exchange rate of $1.25, it's trading at £5.03 or thereabouts, which is the same price as today's UK close.
All IMHO DYOR
Happy
BP not doing well in the US tonight, a further drop tomorrow on the cards here I think.
I expect the next 24 months will be delivery of high expectations and rewards for shareholders.
Mark you write very well informed and insightful posts but i believe you are going to be very disappointed.
Just a view of of a 75 year old former OIM in the oil business(contracting) who has held BP for more than 15 years and has pre Macondo contract notes where my purchases exceeded £6.
Todays performance was dire and it is a relief that I started accumulating Shell when I felt BP were underperforming so that I always have a ready made barometer for on the spot comparison.
Why I am I still here,well I keep dropping my sell price,was £6,Then 5.70 then around 5.50,now I would take £5.25 and move the funds into BHP.
Will be interested to see if the slide today was halted by company buybacks,I sincerely hope not.That would be sheer desperation
BP’s ambitious share buyback plan is entirely logical because it offers excellent value for money. The company’s shares trade at just seven times forecast earnings, which grossly undervalues their long-term prospects.
With a possible dividend increase beyond the 4% hinted at, its cake and eat it time. With BP it always seems like jam tomorrow ( clever eh ) but I expect the next 24 months will be delivery of high expectations and rewards for shareholders.
Share save share match is for everyone, well. Apart from non majority joint ventures
One interesting figure from CFO was on buybacks. From 2021 to end '23 the buybacks were over 20% of total company shares excluding 2024 buybacks. This together with a planned minimum of $14 Billion of buybacks by end '25 is an enormous saving in dividends.
This is beneficial to board members, and excludes employee share schemes but this will be increase the value of my shares over the long run more than paying out dividends . I want a capital growth over the long term and I have calculated that should buybacks continue for ten years at the same rate, my shares will be worth around $110 BILLION as the only shares left. !!
WP
I agree but the relative underperformance was due to the results announcement not due to the call itself. That's all I was saying.
The market is still unsure about the tilt to green and what impact it is having on performance and focus. These are legitimate concerns which I share but the underlying business performance remains strong and the value is being underappreciated.
All IMHO DYOR
Happy
Not oil price related, shell up 1.3% today, bp down 1.9% A 3% swing. Market didnt like the earnings miss and future downward pressure will compound for bp as oil demand looks like it is weakening from the highs of 90
Sold out after update earlier as unimpressed. Share buybacks are known as 'financial engineering' since they can improve EPS without increasing cash but EPS often affects directors remuneration - looks good on paper. Overall uninspiring which is a pity since we have so few large cap stocks on lse cf US.
The drop has nothing specifically to do with the call. The oil price has weakened a bit and Exxon and others reversed earlier premarket gains.
I don't agree with the Company's renewables IEC strategy in general and the market remains sceptical hence the discount to peers but there was nothing wrong with the call.
All IMHO DYOR
Happy
If it was so positive etc etc why the immediate drop after they finished speaking? Too many ex BP employees and pensioners on here with institutionalised rose tinted glasses I reckon
They both seem more at ease this time.
Both clearly know their brief very well.
Very upbeat message.
Clearly see a lot to be happy about going forward to 2025/2026.
Very much like not volume driven ,but driven by cash flow.
Follow the money! Whether it’s traditional oil or convenience or renewables
excellent call. brokers very positive. think we will see some upgrades over the next few days. cfo comes across very well - highly credible, calm and competent.
if there's a negative, it's the performance of travellers which is suffering from a "trucking recession" - i think that's ****ney rhyming slang! also, go-slow on beacon wind in the us because they need to see better infrastructure and pricing structure. speaks to the difficulties of the iec transition in my view.
very strong growth in bpx (our shale business). outstanding pipeline of hydrocarbon projects and lots of production growth potential. oil reduction is an aim not a target and decisions will be driven by returns not arbitrary production numbers. they are wriggling out of net zero bulcaca gradually but surely so all good. but still committed to low-carbon.
we will see a substantial dividend hike next quarter - kate pretty much said as much in response to goldman analyst.
all in all, an excellent update. very cheap stock. will continue to hold for yield and delivery of medium term ebitda targets and cash returns.
all imho dyor
happy
Excellent work Happy and thank you for saving me much of the effort note taking while listening.
Ignoring the earnings misses on results this quarter, I remain very positive going forward.
Thanks for your service !
Mark
One or two acquisition opportunities over next couple of years in low-carbon. They are obviously planning to buy something else in low-carbon but within existing capex frame of $16bn per annum over 2024 and 2025. Hope they spend sensibly. Comments on performance of Travellers are not great. I'm not sure we need more low-carbon but any acquisition would be small.
All IMHO DYOR
Happy
Funilly enough I worked for both of the companies and I'm sorry to say I can remember the ill-fated tie up ... "Shell-Mex BP"
Very positive comments about BPX growth potential. Seem to have excellent assets both on oil and gas side.
Assuming 100k employees, thats 6.5k per employee(!) - makes me wonder how many shares senior leaders are getting because the share rewards are practicaly non existent for first level leaders & below
Happy thank you for posting the salient points, very useful as travelling
Liquids portfolio forward look.
"Awful lot of oil in portfolio". Can grow production by 4% through 2027 but could be higher given excellent, high-margin pipeline. Ruling out high-price acquisitions.
Question about BPX.
Conditions in Permian a bit looser. More rigs available. Supply side a bit better. Top of pack in terms of drilling productivity. We're not feeling any constraints. More detailed report next quarter.