29th Oct 2013 08:42
LONDON (Alliance News) - BP PLC Tuesday said its pretax profit fell 36% in its third quarter compared to the previous year as costs and divestments hit the company but it has increased its quarterly dividend 5.6%.
The multinational oil and gas company said its pretax profit fell to USD5.17 billion for the three months ended September 30 compared to USD8.06 billion the previous year.
The company said its third quarter replacement cost profit, which allows companies to base their cost of goods sold on the current price of oil, fell to USD3.18 billion from USD4.53 billion the previous year.
BP said that after adjusting for a net charge for non-operating items of USD522 million and net favourable fair value accounting effects of USD8 million, both on a post-tax basis, the underlying replacement cost profit for the third quarter slipped to USD3.69 billion, from USD5.02 billion for the same period in 2012.
Weaker refining margins, divestment of refineries and reduced income from its Russian operations due to a major tax charge also hit the company. However, the replacement cost profit figure may be higher than expected as it was much more than the second quarter's USD2.71 billion when the Russian tax charge was at its highest.
The company said its overall production excluding Russia fell 2.3% to 2.2 million barrels of oil per day, due to a range of divestments but that its underlying oil and gas production, not including divestments or Russian activities increased 3.4% based on new major projects to 3.2 million barrels of oil equivalent per day.
The company said its total revenues and other income increased 3.8% to USD98.20 billion from USD94.43 billion.
Profit attributable to shareholders for the quarter decreased to USD3.50 billion from the prior year's USD5.28 billion, with earnings per share declining to 18.47 cents from 27.59 cents last year. However, the company did announce an increase to its quarterly dividend by 5.6% to 9.5 cents per share, which is expected to be paid on December 20.
The company said it expects capital spending in 2014 to remain around the range of USD24 billion to USD25 billion and that it plans to divest a further USD10 billion in assets before the end of 2015.
BP also said the next phase of the court cases regarding the Gulf of Mexico oil spill which will consider the penalty factors set out in the Clean Water Act, is expected to take place in 2014 and so far, the total net charge related to the catastrophe is USD42.5 billion.
BP shares were up 3.9% to 469.50 pence, making it the top mover on the FTSE100 in early trading Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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