BP Q4 results: share price up 4% after more than doubling full-year earnings

BP recorded a strong 2018 performance, with the oil and gas major doubling its profits through a growth in output that was on par and in some cases even outpaced some of its rivals, helping its share price climb more than 4% on Tuesday morning.

The company’s final quarter was also boosted considerably by an increase in output following its large-scale acquisition of BHP.

‘We now have a powerful track record of safe and reliable performance, efficient execution and capital discipline,’ BP Group CEO Bob Dudley said. ‘And we’re doing this while growing the business – bringing more high-quality projects online, expanding marketing in the downstream and doing transformative deals such as BHP.’

‘Our strategy is clearly working and will serve the company and our shareholders well through the energy transition,’ he added.

BP results: key figures

The oil and gas major recorded underlying replacement cost profit for full year 2018 was $12.7 billion, more than double that reported for 2017. The fourth quarter result was $3.5 billion, driven by the strong operating performance across all business segments.

Operating cash flow, excluding Gulf of Mexico oil spill payments, for full year 2018 was $26.1 billion, including a $2.6 billion working capital build (after adjusting for inventory holding losses). This compares with $24.1 billion for 2017, which included a working capital release of $2.6 billion.

Gulf of Mexico oil spill payments in 2018 totalled $3.2 billion on a post-tax basis.

BHP acquisition boosts BP earnings

The London-listed oil and gas company saw its revenues exceed analysts’ forecasts, much to the glee of investors which nudged BP’s share price higher on Tuesday morning.

But despite an overall strong set of results, the company’s debt has risen considerably in the final quarter of 2018 following BP paying the first and largest tranche of its $10.5 billion takeover of BHP.

The acquisition and the debt the company has taken on to facilitate the purchase has slowed the pace of the company’s share buyback programme.

BP intends to complete more than $10 billion worth of divestments over the next two years, with the company selling off around $3.5 billion in 2018, following its transformation BHP deal.

Dividend of 10.25 cents a share announced for the fourth quarter, 2.5% higher than a year earlier.