31st Jul 2014 08:00
LONDON (Alliance News) - BG Group PLC said its pretax profit soared in its second quarter due to strong performance at its liquefied natural gas division, allowing the company to increase its interim dividend by 10%.
The FTSE 100-listed natural gas company said its pretax profit jumped 47% to USD2.13 billion for the three months ended June 30 from USD1.45 billion the previous year as revenues increased 25% to USD5.51 billion from USD4.41 billion.
BG Group shares were up 3.1% to 1,217.38 pence, putting it amongst the top three FTSE 100 risers during early trading on Thursday.
The company said its liquefied natural gas operations achieved additional cargoes and favourable oil prices during the period, pushing up its revenues by 44%, while it deferred certain planned maintenance shutdown activity in the UK until later in the year.
BG Group said its LNG division delivered volumes were 29% higher, with higher realised prices in Asian and South American markets, and its oil volumes increased substantially and achieved higher prices also.
However, BG Group said its operating costs increased 33% to USD3.61 billion from USD2.72 billion with particular costs in its upstream operations and it achieved lower LNG cargo margins, slightly offsetting its profits.
Despite this, the company increased its interim dividend by 10% to 8.47 pence per share when compared to the previous year.
The company also said its first half pretax profit increased 13% to USD4.02 billion from USD3.55 billion previously with a 13% increase in revenues to USD10.49 billion from USD9.32 billion.
In the first quarter the company reported lower profits due to struggles in Egypt, where its sales volumes have fallen 35% from its fourth quarter to 66,000 barrels of oil equivalent per day.
BG Group said in May that the amount of oil being diverted to the domestic market in Egypt remains well above its contractual commitments, and the reservoir performance in the country is continuing to deteriorate. The company is entitled to a lower share of production when oil is diverted into the domestic market.
At the time, the company said its 2014 production guidance remains unchanged at 590,000 to 630,000 barrels of oil equivalent a day at reference conditions, although production is now expected to be at the lower end of the range, given the issues in Egypt.
On Thursday, BG reiterated its production guidance and said that due to delayed maintenance shutdowns in the UK, now planned for the fourth quarter, volumes as expected to be slightly below the second quarter for the remainder of the year.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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