Energy giant BP has suffered a slide in first quarter profits after being stung by falling oil and gas prices.
The oil major generated profits of £1.6billion in the first three months of 2019 – a 12 percent drop on the £1.9billion it made in the same period last year.
But shares nudged up about 1 percent in early trading on Tuesday as BP’s decline still beat City expectations and the firm boosted its dividend, adding to an already attractive yield of 5.6 percent.
BP said that strong supply at the start of 2019 helped to partially offset the impact of weaker oil prices and margins.
‘BP’s performance this quarter demonstrates the strength of our strategy,’ thundered chief executive Bob Dudley.
“We produced resilient earnings and cash flow through a volatile period that began with weak market conditions and included significant turnarounds,” he said.
BP cashed in on a rebound in the cost of crude oil over the last few years, with its profits doubling in 2018. But the price of Brent crude sank to an 18-month low at the end of December, knocking the sector.
Cash flow for the period stood at £4.6billion, excluding a £464million period for its Deepwater Horizon oil spill in the Gulf of Mexico in 2010, and a £773million working capital build.
BP’s shares have risen 3 percent in the last year, compared to a dip of 1 percent for the wide FTSE 100, and spiked 10 percent in the last three months alone, Hunter points out.
‘The company’s historic position as a core portfolio constituent is in little danger, and a matching market consensus of the shares as a buy is most likely to remain intact,’ he said.
Source: Daily Mail