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Doubleorquits
They will report a headline loss because of accounting effects. Have you actually read BPs statement? And as I previously said it won’t be a real loss it’s caused by accounting effects under IFRS. The underlying profits will be $3-4b.
And I’m certainly no deramper (even though this is a FTSE 100 stock not a rampy AIM share).
I have held my shares and haven’t sold one single share throughout.
BDC
Just looking at the Q4 results from last year and if you strip out Rosneft earning we would have made $3.3b and that was with an average realised oil price in the $70s. This quarter the oil price has been in the $90s so even without Rosneft I expect that we will post an underlying profit of around $3.5-$4b (with a headline loss of around $20b due to accounting effects)
It will be listed on the books as a financial asset at fair value. The change in accounting has come due to the resignation of Looney and Dudley. Although they have stated they won't receive dividends from them I'm not sure exactly what happens to them.
https://www.bp.com/en/global/corporate/investors/upstream-major-projects.html#tab_1
We achieved a lot in 2021 and have much more to do in 2022. I think you might be surprised by the revenues we are able to generate over the next few years. With or without Rosneft and against the backdrop of very strong oil prices, especially if the world turns its back on Russian energy.
Brokers maintain an overall buy rating on BP. I believe this is most likely because they can see that the oil price rise will do a lot of heavy lifting when it comes to replacing Rosneft revenue for us and that group revenues likely won't be greatly affected.
BP is way bigger and so much more than its Rosneft shares.
I don't think that will be reflected in the SP, necessarily. The MCAP won't drop by $20b because of an accounting exercise, just like the MCAP didn't drop due to the accounting losses we made due to the spike in LNG prices last year. What the market will price in is the loss of earnings from Rosneft and we have seen this recently with brokers revising their prices downwards. What remains to be seen is how BP will react with regards to production elsewhere. They have maintained forward guidance on earnings so that suggests to me they will look to increase production from remaining assets.
We'll have to wait for future income statements to see just how the earnings have been affected.
I see Shell are following in our footsteps;
https://www.shell.com/media/news-and-media-releases/2022/shell-intends-to-exit-equity-partnerships-held-with-gazprom-entities.html
Some people asking how they will calculate the adjustment, the details were released in the RNS filing.
Two parts to it;
1. non-cash adjusting item charge which is the difference between fair value on 31st March (roughly 2b shares x the SP on that day) and the carrying value of the asset (at end of 2021 this was $14b). Obviously this will depend on the SP at the end of March and so it could change but based on todays Rosneft SP;
$2.68 x 2b shares = $5.36b fair value
$14b - $5.36b + roughly a $9b non-cash adjusting charge.
2. non-cash adjusting item charge due to FOREX losses built up since 2013 which will now need to be accounted for in the income statement (due to IFRS) which is roughly $11b
So it's not difficult to see that we will see a non-cash adjusting items charge of $20-$25b in the Q1 result which will lead to a significant headline loss for the quarter. However it's important to note that no cash is actually leaving the business for these charges and therefore we will still report an underlying profit for the quarter minus Rosneft.
7-9% EBIDA CAGR out to 2025 (at $60 oil)
EBIDA $2b lower in 2025 ($38b group)
Financial frame maintained.
Probably looking at a non-cash adjusting item around $20b with 1Q22 results however I’m more interested in what BP do next. I assume no further divestments and increased production elsewhere to maintain EBIDA from ‘resilient hydrocarbons’.
I intend to remain invested based on current information.
Smartie (ironic), why don't you hop over to the Shell board and moan at them for their operations in Sakhalin. People on this board seem pretty sick of you already. Also have you written to your MP about the fact that the west is still importing around 3.5 million barrels of oil per day from Russia? By your logic we should immediately stop this and push the impoverished into an even deeper energy crisis, but I guess you don't want people to be able to eat or heat their homes. Where are you morals?
Never heard so much pish as that which has been coming from the board lately. I had intended not to write here anymore, I think I shall do just that, it's descended into utter 'Loonacy'!
No, Caitlin.
I was replying to your message “and the rest” when I stated that our ROSN stake is worth $10b. You failed to back up your post with any meaningful information, as usual.
My reference of 40% was in response to Flummoxed.
Thanks, Mark!
One thing comes to mind when I read this forum lately;
“Be greedy when others are fearful”
If the SP does fall back, I’ll certainly be topping up and will continue to reinvest divis long into the future.
All the best to you too!