Yesterday we reported on Shell’s excellent results, which doubled its profits. It’s British rival BP had a similarly successful quarter, reporting its highest quarterly net profit in 14 years and the second highest in the company’s history. The reasons are the same as for Shell and other industry rivals. High commodity market prices and high refinery margins.
How did the company perform?
So the biggest success is the net profit which was $8.5 billion. Which are $2.20 billion more than the first quarter of this year and even $5.65 billion more than the second quarter of last year.
Year-over-year, the company has largely reduced its net debt, which just a year ago was $32.7 billion and is now only $22.82 billion.
BP Retail Gas Station sign with blue cloudy sky
The company will give away some of the excess earnings in dividends
The company raised its dividend by 10% to 6.006 cents per share. BP halved its dividend to 5.25 cents in July 2020 for the first time in a decade in the wake of the pandemic. It has since promised to increase it by 4% a year. So the current 10% hike is a nice bonus for investors.
BP also raised its share buyback plan for the current quarter to $3.5 billion. In the first half of the year, it issued $4.1 billion for share buybacks. It intends to stick to its target and use 60% of the excess cash to buy back shares.
BP expects elevated prices into the next quarter
The energy firm expects oil and gas prices and refining margins to remain “elevated” in the third quarter and has highlighted investment in additional supply.
On crude oil prices, the company wrote in its statement.
“BP expects oil prices to remain elevated in the third quarter due to ongoing disruption to Russian supply, reduced levels of spare capacity and with inventory levels significantly below the five-year average.”
Read also: Russia has stopped gas supplies to Latvia
On gas prices, they issued a similar outlook.
“BP expects gas prices to remain elevated and volatile during the third quarter due to a lack of supply to Europe with the outlook heavily dependent on Russian pipeline flows or other supply disruptions.”
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