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(Alliance News) - BP PLC on Tuesday reaffirmed it is sticking to its commitment to share buybacks despite reporting a profit decline amid a fall in oil prices.
The London-based oil major said revenue fell to USD52.59 billion in the fourth quarter of 2023 from USD70.36 billion a year earlier.
Quarterly pretax profit dived to USD1.10 billion from USD16.90 billion.
BP posted underlying replacement cost profit of USD2.99 billion for the fourth quarter, down 38% from USD4.81 billion a year before but outperforming analyst consensus of USD2.77 billion by 8.0%.
RC pretax profit slumped to USD3.57 billion, down sharply from USD19.15 billion a year ago and an under-performance of 39% to analyst consensus of USD5.86 billion.
The decline reflects average Brent crude oil prices falling by 18% to USD82.64 per barrel in 2023 from USD101.32 in 2022, according to marker prices cited by BP.
For all of 2023, revenue dropped by 14% to USD213.03 billion from USD248.89 billion on-year.
However, pretax profit jumped by 54% to USD23.75 billion in 2023 from USD15.41 billion.
Pretax profit rose despite the fall in revenue, as BP spent USD119.31 billion on purchases in 2023, reduced by 15% from USD141.04 billion in 2022. Further, net impairment and loss on sale of businesses narrowed significantly to USD5.86 billion from USD30.52 billion.
Underlying RC profit dived 50% to USD13.84 billion in 2023 from USD27.65 billion in 2022.
Despite the lower profitability, BP declared a quarterly dividend per share 7.27 US cents, up 10% versus 6.61 US cents. This brings the full-year dividend to 28.42 cents, up 18% from 24.08 cents.
BP said it completed USD1.5 billion share buyback on Friday, and now intends on initiating a new USD1.75 billion buyback, prior to reporting its first quarter results which are due on May 7. It intends to buy back USD3.5 billion in shares for the first half of 2024.
BP added that it plans share buybacks of at least USD14 billion through 2025 as part of its commitment to return at least 80% of surplus cash flow to shareholders.
Chief Executive Murray Auchincloss said: "Looking back, 2023 was a year of strong operational performance with real momentum in delivery right across the business. And as we look ahead, our destination remains unchanged – from international oil company to integrated oil company – focused on growing the value of BP. We are confident in our strategy, on delivering as a simpler, more focused and higher-value company, and committed to growing long-term value for our shareholders."
Chief Financial Officer Kate Thomson said: "We remain focused on strengthening the balance sheet, with net debt falling to USD20.9 billion, the lowest level over the past decade. As we look forward, we are staying disciplined, tightening our capital expenditure frame and simplifying and enhancing our share buyback guidance through 2025."
It was the first annual results for BP under Auchincloss and Thomson. Auchincloss, previously CFO, was made interim CEO back in September after the departure of Bernard Looney under a cloud. Thomson became interim CFO at the same time. Both were confirmed as permanent in their roles last month.
BP shares rose 5.7% to 480.10 pence each on Tuesday morning in London.
By Tom Budszus, Alliance News slot editor
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