BP raises dividend after swing back into profit
BP: making good progress
Energy giant BP plans to raise its dividend by 4% and increase share buybacks after beating expectations for second-quarter profits on the back of higher oil and gas prices.
The company will increase its second-quarter dividend to 5.46p a share from 5.25p a year earlier and said it would buy back $1.4bn of shares.
BP’s underlying replacement cost profit came in at $2.8bn in the three months to the end of June compared with a $6.7bn loss a year earlier.
For the first half posted profit of $5.4 billion against a $5.9bn loss last time.
In a statement chief executive Bernard Looney said: “We are a year into executing bp’s strategy to become an integrated energy company and are making good progress – delivering another quarter of strong performance while investing for the future in a disciplined way.
“Based on the underlying performance of our business, an improving outlook for the environment and confidence in our balance sheet, we are increasing our resilient dividend by 4% per ordinary share and in addition, we are commencing a buyback of $1.4 billion from first half surplus cash flow.
“On average at around $60 per barrel, we expect to be able to deliver buybacks of around $1 billion per quarter and to have capacity for an annual increase in the dividend per ordinary share of around 4%, through 2025.
“This shows we continue to perform while transforming BP –generating value for our shareholders today while we transition the company for the future.”
James Andrews, senior finance expert at money.co.uk, said: “BP’s previous earnings demonstrated renewed confidence in the company’s outlook, with a stronger than expected performance and improved year-on-year revenue growth.
“Their second-quarter profits rising to $2.8 billion came as a welcome surprise to many sceptical analysts, who feared profits would stagnate, and BP now plan to raise its dividend by 4%.
“While navigating the pandemic provided its challenges for BP, this increase in profits is sure to please shareholders, who were promised returns of 60% of any surplus cash flow from the oil giant.
“As the world returns to a sense of normality, the demand for fuel is expected to rise globally, hopefully seeing a significant improvement to prices.”