24th Apr 2007 07:02
BP PLC24 April 2007 BP p.l.c. Group Results First Quarter 2007 London 24 April 2007 FOR IMMEDIATE RELEASE ---------------------- First First Fourth First Quarter Quarter Quarter Quarter 2007 vs 2007 2006 2006 2006 =======================================$millionProfit for the period* 4,664 2,880 5,623Inventory holding (gains) losses (303) 1,015 (358) ---------------------------------------Replacement cost profit 4,361 3,895 5,265 (17%) ======================================= - per ordinary share (pence) 11.54 10.37 14.66- per ordinary share (cents) 22.50 20.08 25.66 (12%)- per ADS (dollars) 1.35 1.21 1.54 ======================================= • BP's first quarter replacement cost profit was $4,361 million, compared with $5,265 million a year ago, a decrease of 17%. • The first quarter result included a net non-operating gain of $363 million compared with a net non-operating charge of $17 million in the first quarter of 2006. • Net cash provided by operating activities for the quarter was $8.0 billion compared with $8.9 billion a year ago. • The effective tax rate on replacement cost profit of continuing operations for the quarter was 35%; the rate was also 35% a year earlier. • Net debt at the end of the quarter was $21.8 billion. The ratio of net debt to net debt plus equity was 20% compared with 16% a year ago. • Capital expenditure, excluding acquisitions, was $3.7 billion for the quarter. Total capital expenditure and acquisitions was $4.8 billion, which included $1.1 billion in respect of the acquisition of Chevron's Netherlands manufacturing company. Capital expenditure excluding acquisitions is expected to be around $18 billion for the year. Disposal proceeds were $0.9 billion for the quarter. • The quarterly dividend, to be paid in June, is 10.325 cents per share ($0.6195 per ADS) compared with 9.375 cents per share a year ago, an increase of 10%. In sterling terms, the quarterly dividend is 5.151 pence per share, compared with 5.251 pence per share a year ago, a decrease of 2%. During the quarter, the company repurchased 238 million of its own shares for cancellation at a cost of $2.5 billion. * Profit attributable to BP shareholders. The commentaries above and following are based on replacement cost profit andshould be read in conjunction with the cautionary statement on page 9. Analysis of Replacement Cost Profit and Reconciliation to Profit for the Period -------------------------------------------------------------- First Fourth First Quarter Quarter Quarter 2007 2006 2006 ===============================$ millionExploration and Production 6,043 5,063 6,823Refining and Marketing 838 312 1,612Gas, Power and Renewables 206 470 301Other businesses and corporate (116) (276) (217)Consolidation adjustment 83 (103) (8) -------------------------------RC profit before interest and tax 7,054 5,466 8,511 ------------------------------- Finance costs and other finance expense (171) (149) (143)Taxation (2,440) (1,347) (2,929)Minority interest (82) (75) (71) ------------------------------- RC profit from continuing operations attributable to BP shareholders(a) 4,361 3,895 5,368 =============================== Inventory holding gains (losses) for continuing operations 303 (1,015) 358 ------------------------------- Profit for the period from continuing operations attributable to BP shareholders 4,664 2,880 5,726Profit (loss) for the period from Innovene operations(b) - - (103) -------------------------------Profit for the period attributable to BP shareholders 4,664 2,880 5,623 =============================== RC profit from continuing operations attributable to BP 4,361 3,895 5,368shareholdersRC profit (loss) from Innovene operations - - (103) -------------------------------Replacement cost profit 4,361 3,895 5,265 =============================== (a) Replacement cost profit reflects the current cost of supplies. Thereplacement cost profit for the period is arrived at by excluding from profitinventory holding gains and losses. BP uses this measure to assist investors toassess BP's performance from period to period. Replacement cost profit is not arecognized GAAP measure. (b) See further detail in Note 3. Results include Non-operating Items ----------------------------- First Fourth First Quarter Quarter Quarter 2007 2006 2006 ================================$ millionExploration and Production 748 (177) (386)Refining and Marketing (229) (53) 564Gas, Power and Renewables 9 215 (55)Other businesses and corporate 34 (188) 9 -------------------------------- 562 (203) 132Taxation (199) 51 (46) --------------------------------Continuing operations 363 (152) 86 -------------------------------- Innovene operations - - (96)Taxation - - (7) --------------------------------Total for all operations 363 (152) (17) ================================ An analysis of non-operating items by type is provided on page 19. Per Share Amounts ---------------- First Fourth First Quarter Quarter Quarter 2007 2006 2006 ==================================Results for the period ($ million)Profit(a) 4,664 2,880 5,623Replacement cost profit 4,361 3,895 5,265 ---------------------------------- Shares in issue at period end (thousand)(b) 19,290,540 19,510,496 20,341,135- ADS equivalent (thousand)(b) 3,215,090 3,251,749 3,390,189Average number of shares outstanding (thousand)(b) 19,384,508 19,610,871 20,521,872- ADS equivalent (thousand)(b) 3,230,751 3,268,479 3,420,312Shares repurchased in the period (thousand) 237,916 310,385 349,079 Per ordinary share (cents)Profit for the period 24.06 15.04 27.40RC profit for the period 22.50 20.08 25.66 Per ADS (cents)Profit for the period 144.36 90.24 164.40RC profit for the period 135.00 120.48 153.96 ---------------------------------- (a) Profit attributable to BP shareholders. (b) Excludes treasury shares. Dividends -------- BP today announced a dividend of 10.325 cents per ordinary share to be paid inJune. Holders of ordinary shares will receive 5.151 pence per share and holdersof American Depository Receipts (ADRs) $0.6195 per ADS. The dividend is payableon 4 June to shareholders on the register on 11 May. Participants in theDividend Reinvestment Plan (DRIP) or the DRIP facility in the US Direct AccessPlan will receive the dividend in the form of shares, also on 4 June. First Fourth First Quarter Quarter Quarter 2007 2006 2006 ================================= Dividends paid per ordinary share cents 10.325 9.825 9.375 pence 5.258 5.241 5.288Dividends per ADS (cents) 61.95 58.95 56.25 ================================= Net Debt Ratio - Net Debt: Net Debt + Equity ----------------------------------- First Fourth First Quarter Quarter Quarter 2007 2006 2006 =================================$ millionGross debt 23,728 24,010 18,679Cash and cash equivalents 1,956 2,590 2,939 ---------------------------------Net debt 21,772 21,420 15,740 =================================Equity 85,749 85,465 80,881Net debt ratio 20% 20% 16% ================================= Exploration and Production ---------------------- First Fourth First Quarter Quarter Quarter$ million 2007 2006 2006 =================================Profit before interest and tax(a) 6,054 5,057 6,816Inventory holding (gains) losses (11) 6 7 ---------------------------------Replacement cost profit before interest and tax 6,043 5,063 6,823 ================================= By region:UK 1,062 1,534 1,165Rest of Europe 720 249 303US 1,652 952 2,311Rest of World 2,609 2,328 3,044 --------------------------------- 6,043 5,063 6,823 =================================Results include:Non-operating itemsUK 145 289 (394)Rest of Europe 533 (13) -US (8) (269) 2Rest of World 78 (184) 6 --------------------------------- 748 (177) (386) ================================= Exploration expenseUK 20 6 7Rest of Europe - - -US 77 324 66Rest of World 59 78 116 --------------------------------- 156 408 189 ================================= Production (net of royalties)(b)Liquids (mb/d) (net of royalties)(c)UK 236 239 281Rest of Europe 59 57 68US 526 533 566Rest of World 1,625 1,587 1,618 --------------------------------- 2,446 2,416 2,533 =================================Natural gas (mmcf/d) (net of royalties)UK 907 888 1,196Rest of Europe 41 90 94US 2,163 2,196 2,485Rest of World 5,391 5,082 4,938 --------------------------------- 8,502 8,256 8,713 =================================Total hydrocarbons (mboe/d)(d)UK 393 392 487Rest of Europe 66 73 83US 899 912 995Rest of World 2,554 2,463 2,470 --------------------------------- 3,912 3,840 4,035 ================================= Average realizations(e)Total liquids ($/bbl) 53.43 54.13 55.88Natural gas ($/mcf) 4.86 4.38 5.54Total hydrocarbons ($/boe) 41.06 40.13 44.20 ================================= (a) Profit from continuing operations and includes profit after interest and tax of equity-accounted entities. (b) Includes BP's share of production of equity-accounted entities. (c) Crude oil and natural gas liquids. (d) Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels. (e) Based on sales of consolidated subsidiaries only - this excludes equity-accounted entities. Exploration and Production ---------------------- The replacement cost profit before interest and tax for the first quarter was$6,043 million, a decrease of 11% over the first quarter of 2006. This resultwas impacted by lower oil and gas realizations and lower reported volumes,reflecting the impact of the divestment activity in 2006. In addition, itincluded higher costs, reflecting the impacts of sector-specific inflation,increased integrity spend and higher depreciation charges. BP's share of incomefrom TNK-BP was negatively affected by lower prices and the adverse effect oflagged tax reference prices. The result included a net non-operating gain of $748 million, with the mostsignificant items being the gain on the sale of our assets in the Netherlands,which completed on 31 January, and fair value gains on embedded derivativesrelating to North Sea gas contracts. The corresponding quarter in 2006contained a net non-operating charge of $386 million. After adjusting for the impact of divestments, production was flat compared withthe first quarter of 2006. Actual production was down 123 mboe/d. Full yearproduction in 2007 is expected to be in the range of 3.8 to 3.9 mmboe/d, in linewith the guidance given with our fourth quarter results. During the quarter, we had our first lifting from the Dalia field in Angola,with the field ramping up as planned, and the BTC pipeline celebrated theloading of its 100 millionth barrel at the Ceyhan terminal. In Angola, theGreater Plutonio FPSO has been successfully moored. We continued our strong exploration track record in Angola with Miranda, our13th successful well in Block 31, and made the Giza North gas discovery inEgypt. Since the end of the quarter, we have divested our interest in the Entrada fieldin the deepwater Gulf of Mexico, and acquired an increased interest in the Badinfield in Pakistan in exchange for our ownership interest in the West TexasPipeline System. Refining and Marketing ------------------- First Fourth First Quarter Quarter Quarter 2007 2006 2006 =================================$ millionProfit (loss) before interest and tax(a) 1,129 (706) 2,038Inventory holding (gains) losses (291) 1,018 (426) ---------------------------------Replacement cost profit (loss) before interest and tax 838 312 1,612 ================================= By region:UK (10) 190 (148)Rest of Europe 298 336 564US 122 (421) 637Rest of World 428 207 559 --------------------------------- 838 312 1,612 =================================Results include:Non-operating itemsUK (163) 23 20Rest of Europe (12) (89) 229US (58) 25 96Rest of World 4 (12) 219 --------------------------------- (229) (53) 564 =================================Refinery throughputs (mb/d)UK 148 188 111Rest of Europe 640 660 639US 1,152 1,052 976Rest of World 292 294 296 ---------------------------------Total throughput 2,232 2,194 2,022 =================================Refining availability (%)(b) 81.6 81.6 79.9 =================================Oil sales volumes (mb/d)Refined productsUK 335 354 345Rest of Europe 1,246 1,368 1,315US 1,564 1,541 1,599Rest of World 624 601 567 ---------------------------------Total marketing sales 3,769 3,864 3,826Trading/supply sales 2,026 1,920 2,204 ---------------------------------Total refined product sales 5,795 5,784 6,030Crude oil 2,017 1,959 2,571 ---------------------------------Total oil sales 7,812 7,743 8,601 =================================Global Indicator Refining Margin ($/bbl)(c)NWE 4.16 2.49 2.88USGC 10.14 7.92 10.86Midwest 7.62 5.42 4.89USWC 22.21 14.59 11.22Singapore 4.84 2.95 3.54BP Average 9.45 6.30 6.28 =================================Chemicals production (kte)UK 256 159 303Rest of Europe 748 797 842US 1,076 976 789Rest of World 1,520 1,357 1,687 ---------------------------------Total production 3,600 3,289 3,621 ================================= (a) Profit from continuing operations and includes profit after interest and tax of equity-accounted entities. (b) Refining availability is defined as the ratio of units which are available for processing, regardless of whether they are actually being used, to total capacity. Where there is planned maintenance, such capacity is not regarded as being available. During 2006, there was planned maintenance of a substantial part of the Texas City refinery. (c) The Global Indicator Refining Margin (GIM) is the average of regional indicator margins weighted for BP's crude refining capacity in each region. Each regional indicator margin is based on a single representative crude with product yields characteristic of the typical level of upgrading complexity. The regional indicator margins may not be representative of the margins achieved by BP in any period because of BP's particular refinery configurations and crude and product slate. Refining and Marketing ------------------- The replacement cost profit before interest and tax for the first quarter was$838 million compared with $1,612 million for the same period last year. Thequarter's result included a net non-operating charge of $229 million, primarilyin respect of asset impairments. This compares with a net non-operating gain of$564 million for the same period last year. Compared with the first quarter of 2006, our result benefited from a strongeroperating environment for both refining and marketing. However, the benefit ofhigher refining throughput at Texas City during the quarter was more than offsetby the impact of operational issues at a number of our other refineries,particularly in the US. In addition, the quarter's result reflects a significantIFRS fair value accounting charge, lower supply optimization benefits andgreater integrity spend. The refining throughputs for the quarter were 2,232 mb/d compared with 2,022 mb/d for the same quarter last year. The improvement in throughputs was mainly dueto the partial resumption of operations at the Texas City refinery. Excludingthe Texas City refinery, refining availability for the first quarter of 2007 was94.6% compared with 96.0% in the first quarter of 2006. Marketing sales were3,769 mb/d compared with 3,826 mb/d for the corresponding period in 2006,reflecting lower heating oil demand in Europe caused by relatively mild winterweather. On 31 March 2007, BP completed its acquisition of Chevron's Netherlandsmanufacturing company, Texaco Raffinaderij Pernis B.V., for $1.1 billion. BP agreed to sell, subject to required regulatory approvals, its CorytonRefinery in Essex, UK, to Petroplus Holdings AG for consideration of $1.4billion, plus working capital. Furthermore, BP announced its intention to sellits ethyl acetate and vinyl acetate monomer manufacturing units at Saltend, nearHull, UK. BP announced it had selected the University of California Berkeley, and itspartners the University of Illinois at Urbana-Champaign and the LawrenceBerkeley National Laboratory, to join in the previously announced $500 millionresearch programme to explore how bioscience can be used to increase energyproduction and reduce the impact of energy consumption on the environment. Late in the quarter, operational issues at the Whiting Refinery have reducedthroughput to around 200,000 barrels per day, about half its capacity, andlimited the crude slate to primarily sweet grades. This will continue until wecomplete the necessary repairs. Gas, Power and Renewables ----------------------- First Fourth First Quarter Quarter Quarter 2007 2006 2006 =============================== Profit before interest and tax(a) 206 468 238Inventory holding (gains) losses - 2 63 -------------------------------Replacement cost profit before interest and tax 206 470 301 ===============================By region:UK 48 147 (72)Rest of Europe 7 143 1US 26 114 178Rest of World 125 66 194 ------------------------------- 206 470 301 ===============================Results include:Non-operating itemsUK 7 56 (55)Rest of Europe - 189 -US 1 - -Rest of World 1 (30) - ------------------------------- 9 215 (55) =============================== (a) Profit from continuing operations and includes profit after interest and tax of equity-accounted entities. The replacement cost profit before interest and tax for the first quarter was$206 million compared with $301 million a year ago. The non-operating gain forthe first quarter comprises fair value gains on embedded derivatives of $7million and a net gain of $2 million on the sale of assets. The correspondingquarter in 2006 included a fair value loss of $55 million on embeddedderivatives. The first quarter's result was significantly lower than the same period in 2006,primarily due to a lower contribution from the marketing and trading business,partially offset by strong operating performance from the NGL's business,particularly in Canada, a positive impact in respect of non-operating items anda benefit due to the absence of last year's IFRS fair value accounting charge. In March, BP Solar began construction of two mega cell plants, one at itsEuropean headquarters in Madrid, Spain and the second at its joint venturefacility, Tata BP Solar, in Bangalore, India. Also, we expect to beginconstruction of a wind power generation project in India and five wind powergeneration projects in the US, located in California, Colorado, North Dakota andTexas, in 2007. These projects are expected to deliver a combined generationcapacity of more than 500 megawatts. During the quarter, China's first LNGterminal at Guangdong (BP 30%) reached the milestone of receiving 1 milliontonnes of LNG, which is supplied to power, industrial and residential customersin Southeast China. Other Businesses and Corporate -------------------------- First Fourth First Quarter Quarter Quarter 2007 2006 2006 ===============================$ millionProfit (loss) before interest and tax(a) (115) (265) (215)Inventory holding (gains) losses (1) (11) (2) -------------------------------Replacement cost profit (loss) before interest and tax (116) (276) (217) =============================== By region:UK (46) 280 (141)Rest of Europe 21 (97) (3)US (114) (319) (104)Rest of World 23 (140) 31 ------------------------------- (116) (276) (217) ===============================Results include:Non-operating itemsUK - 13 -Rest of Europe 28 (2) -US 6 (199) 9Rest of World - - - ------------------------------- 34 (188) 9 =============================== (a) Profit from continuing operations and includes profit after interest and tax of equity-accounted entities. Other businesses and corporate comprises Finance, the group's aluminium asset,interest income and costs relating to corporate activities. The first quarter'sresult includes a net gain of $34 million in respect of non-operating items. Cautionary Statement: The foregoing discussion contains forward lookingstatements particularly those regarding capital expenditure, production and theconstruction of wind power generation projects and their expected combinedgeneration capacity. By their nature, forward looking statements involve riskand uncertainty and actual results may differ from those expressed in suchstatements depending on a variety of factors including the following: the timingof bringing new fields on stream; industry product supply; demand and pricing;operational problems; general economic conditions; political stability andeconomic growth in relevant areas of the world; changes in laws and governmentalregulations; exchange rate fluctuations; development and use of new technology;the success or otherwise of partnering; the actions of competitors; naturaldisasters and adverse weather conditions; changes in public expectations andother changes to business conditions; wars and acts of terrorism or sabotage;and other factors discussed in this Announcement. For more information youshould refer to our Annual Report and Accounts 2006 and our 2006 Annual Reporton Form 20-F filed with the US Securities and Exchange Commission. 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