BP PLC - $BP - Earnings Analysis: Significant progress on cost reduction targets with $800 million of structural cost reductions achieved.
Business Model
BP generates revenue primarily through sales of oil and gas, refining products, and services through its gas & low carbon energy, oil production & operations, and customers & products segments.
Revenue Sources
- Sales of crude oil and refined products
- Sales of natural gas, LNG, and NGLs
- Revenue from convenience and mobility services
Income Statement Analysis
- Sales and other operating revenues decreased by 3.2% from Q3 2024 to Q4 2024.
- Profit before taxation decreased significantly from a profit of $1,398 million in Q3 2024 to a loss of $503 million in Q4 2024.
- Profit attributable to bp shareholders decreased dramatically from $206 million in Q3 2024 to a loss of $1,959 million in Q4 2024
Balance Sheet Analysis
- Total assets increased slightly by 0.69% from December 31, 2023, to December 31, 2024.
- Total liabilities increased by 4.67% from December 31, 2023, to December 31, 2024.
- Total equity decreased by 8.39% from December 31, 2023, to December 31, 2024.
Cash Flow Analysis
- Net cash provided by operating activities increased by 9.85% from Q3 2024 to Q4 2024.
- Net cash used in investing activities decreased significantly by 58.55% from Q3 2024 to Q4 2024.
- Net cash used in financing activities decreased by 80.72% from Q3 2024 to Q4 2024.
Capital Allocation
BP is committed to a resilient dividend. A dividend per ordinary share of 8 cents was announced for the fourth quarter. BP also executed share buybacks of $7.1 billion in 2024. The Company invested $16.2 billion in capital expenditure in 2024.
Management Commentary
We have delivered structural cost reductions of around $800 million this year, more than offsetting the impacts of inflation, energy costs, foreign exchange effects and growth costs
I am pleased to report that we have delivered structural cost reductions of around $800 million this year, more than offsetting the impacts of inflation, energy costs, foreign exchange effects and growth costs.
It was also a difficult year for our customer and products business, notably in refining, I remain confident that the actions we are taking will drive an improvement in performance
Overall Sentiment: Cautiously optimistic, with a focus on cost management and future growth initiatives. Focus on actions to drive performance and it will enable us to grow cash flow and returns
Recommendation
Rating: Hold
Reason for Rating: Given the mixed financial performance, ongoing transformation, and future uncertainties, a HOLD recommendation is appropriate at this time.
Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.
Generated on: 2/12/2025, 2:40:31 AM