Oil and gas major BP (BP : LON) has posted a weaker-than-expected net profit, which was down 48% year-on-year - driven by a weak gas market as it progresses a company strategy reset to focus on forward-looking resilience.
That 48% dip was attributable to its underlying replacement cost (RC) profit of $1.4 billion for the quarter, down from $2.7 billion a year ago - but up from $1.2 billion in the previous quarter.
Operating cash flow was $2.83 billion, down from $7.4 billion in Q4 - well below the $4.27 billion consensus forecast, with net debt rising about $4 billion to $26.97 billion - lower than the expected $25.1 billion.
As part of BP's strategy reset away from renewables and back into its bread and butter oil and gas, Giulia Chierchia, BP’s sustainability strategy executive, is stepping away from her role on 1 June to “pursue other opportunities” outside the company.
“In February, we announced a fundamental reset of our strategy - to grow the upstream, focus the downstream and invest with discipline in the transition - and we have already made significant progress,” BP chief executive Murray Auchincloss says.
“So far this year we have started up three major projects, made six exploration discoveries and have progressed our divestment program - all while delivering strong operational performance, with over 95% upstream plant reliability supporting the best operating efficiency on record, and over 96% refining availability.
“We 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.”
Based on the first quarter's results, BP says it intends to execute a $0.75 billion share buyback to add to the $1.75 billion share buyback program it completed last week.
As part of the company restructuring Auchincloss has flagged a $20 billion asset sell-off through to 2027, with $3-$4 billion of that expected this year.
BP shares have fallen more than 20% since announcing the strategy shift, down 2.2% to trade at £353.75.
