29th Apr 2025 09:07
(Alliance News) - BP PLC on Tuesday lowered its share buyback after first quarter profit fell short of market expectations.
In response, shares in the London-based oil major fell 3.7% at 348.45 pence in London on Tuesday. Shares in BP have fallen 33% in the last 12 months.
Underlying replacement cost profit nearly halved to USD1.38 billion in the first quarter of 2025, falling from USD2.72 billion a year prior, and missing the USD1.53 billion company-compiled consensus.
Pretax profit plunged 32% to USD3.13 billion in the quarter from USD4.63 billion a year prior. Total revenue declined 4.2% to USD47.88 billion from USD49.96 billion.
Profit has been hit by a sharp fall in oil prices and refining margins compared to a year ago.
Operating cash flow declined to USD2.83 billion from USD5.01 billion a year prior.
Net debt increased to USD26.97 billion from USD24.02 billion, primarily driven by lower operating cash flow. In the last quarter alone, net debt rose from USD23.00 billion.
BP declared a dividend of 8.00 US cents, unchanged from the prior quarter, but up 10% from 7.27 cents a year ago.
In addition, it announced a GBP750 million share buyback, at the low-end of the previously guided range of GBP750 million to USD1 billion and a marked easing from prior quarters.
BP said the USD1.75 billion share buyback programme announced with the fourth quarter results was completed on April 25.
BP said it expects total shareholder distributions of 30% to 40% of operating cash flow, over time.
The company expects capital expenditure of around USD14.5 billion in 2025 and has a capital frame of around USD13 to USD15 billion for 2026 and 2027.
In February, BP announced an operational reset, moving away from its green energy strategy.
Chief Executive Officer Murray Auchincloss said the firm has has already made "significant progress".
"So far this year we have started up three major projects, made six exploration discoveries and have progressed our divestment programme - all while delivering strong operational performance," he said.
Auchincloss said BP will continue to "monitor market volatility and changes and remain focused on moving at pace."
"I'm confident that our plans to strengthen the balance sheet, reduce costs, and improve cash flow and returns will grow long-term shareholder value and strengthen the resilience of BP," he added.
Looking ahead, BP expects second quarter reported upstream production to be broadly flat compared with the first-quarter 2025.
In its customers business, BP expects seasonally higher volumes compared to the first quarter.
In products, BP expects a significantly higher level of planned refinery turnaround activity compared to the first quarter.
BP expects divestment and other proceeds to be around USD3 to USD4 billion in 2025, weighted towards the second half.
By Jeremy Cutler, Alliance News reporter
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